i|j  ECONOMICS 

iB!     fa^  Upper  Grades 


DOLE 


D.   C.  HEATH   &  CO. 


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Form  L-9-15m-8,'24 


ECONOMICS    FOR 
UPPER    GRADES 

BY 

CHARLES    F.    DOLE 


WITH    INTRODUCTION    BY 

ALBERT    SHIELS 

RECENTLY    SUPERINTENDENT   OF    SCHOOLS 
LOS    ANGELES,    CALIFORNIA 


D.   C.    HEATH    &   CO.,    PUBLISHERS 

BOSTON  NEW  YORK  CHICAGO 


53764 


Copyright,  191 8  and  1920 
By  Charles  F.  Dole 

2EO 


V  \  -7 


;o 


INTRODUCTION 

The  war  has  stirred  mightily  the  hearts  of  men.     Exal- 
tation, sacrifice,  and  service  have  suffered  their  inevitable 
,  reaction.     The  development  of  industry  has  brought  new 
"^  alignments,  and  though  these  would  have  confronted  us  in 
^  any  case,  yet  now,  in  the  reaction  from  a  great  emotion,  thei 
^\^  world  that  meets  them  is  a  troubled,  a  hesitant,  a  disappointed 
world.     Old  conceptions,  some  of  them  as  old  as  the  nation, 
which  were  once  accepted  as  we  accept  the  sunrise  or  the  rule 
of  three,  are  called  upon  to  prove  their  own  validity.     De- 
(^  mocracy  is  no  longer  a  question  of  a  constitution  or  a  code 
^  of  laws ;   it  is  enmeshed  in  problems  of  wages  and  costs  and 
distribution.     We  cannot  understand  our  politics  unless  we 
study  our  economics.     Perhaps  it  is  as  well  that  Americans 
are  being  compelled  to  analyze  the  truth  of  principles  they 
so  long  have  taken  for  granted,  if  for  no  other  reason  than 
that   they  have  accepted  them   too  casually,  and   too  in- 
dolently.    The  political  heritage  of  a  people  will  not  endure 
neglect.     Such    things    as    representative    government,    the 
rule  of  the  majority,  the  liberty  of  opinion,  obedience  to  law, 
were  gained  by  painful  effort,  and  only  painful  effort  will 
retain  them. 

These  ideas  and  others  akin  to  them  are  the  sacred  things 
of  the  Republic.  In  the  Egypt  of  the  ancients,  it  was  the 
duty  of  a  priesthood  to  preserve  the  traditions  of  the  people. 
Education  and  those  engaged  in  education  are  the  priesthood 
of  the  modern  time. 

They  it  is  who  must  keep  the  torch  alight  and  through  the 
children  pass  it  to  succeeding  generations.     And  because 


iv  INTRODUCTION 

at  this  time  not  only  the  defects  of  our  democracy,  but  its 
principles  as  well,  are  being  subjected  to  criticism,  and  to 
assault,  because  any  intelligent  discussion  of  these  questions 
must  hinge  on  economic  as  well  as  on  political  principles, 
the  schools  are  charged,  as  no  other  institution  is,  with  the 
mission  of  imparting  sound  knowledge  and  right  guidance. 

Governments,  like  other  human  institutions,  are  modified 
from  time  to  time,  as  are  the  conditions  that  influence  them. 
New  policies  are  adopted,  new  duties  undertaken.  But, 
as  in  every  evolution,  principles  continue,  and  only  their 
applications  change.  If  these  principles  of  our  people  are 
misunderstood,  or  if  some  of  them  are  attacked  through 
ignorance  or  passion  or  lust  of  gain,  then  imperatively  must 
they  be  recognized  and  reestablished,  not  for  themselves, 
—  for  they  are  imperishable  —  but  for  the  safety  of  society. 
As  in  other  ages,  so  now  education  must  reflect  the  needs  of 
the  period. 

In  popular  conception,  economics  is  a  dry,  even  a  depress- 
ing science.  Sometimes,  alas,  writers  develop  an  infinite 
capacity  to  make  interesting  things  forbidding.  For  there 
are  very  useful  and  very  fundamental  truths  of  economics, 
as  of  politics,  that  as  they  touch  the  life  of  every  citizen  in 
a  very  realistic  fashion,  are,  for  that  reason,  of  peculiar 
interest  to  him.  Such  truths  lend  themselves  to  a  wealth 
of  illustration  familiar  even  to  the  very  young.  A  boy  or 
girl  need  not  wait  for  the  high  school  to  know  the  difference 
between  money  and  wealth,  the  absurdity  of  trying  to  create 
by  legislation  things  that  can  be  produced  only  by  good  hard 
work,  the  difference  between  liberty  and  license,  the  need 
of  the  expert  worker  in  the  expert's  job,  the  inherent  fairness 
of  keeping  faith  on  a  contract  freely  made,  —  which  is  only 
a  demand  of  decency  that  a  man  keep  his  promise,  —  the 
reasons  both  ethical  and  prudential  why  a  citizen  should 
consider  the  public  welfare,  the  need  of  tolerance,  the  folly  of 


INTRODUCTION  V 

hysterical  suspicion  and  wild  accusation  against  any  one  not 
of  his  race  or  nation.  These  are  not  things  that  need  really 
be  learned,  for  their  truth  and  justice  even  the  wayfarer 
knows,  —  rather  they  are  to  be  related  to  the  life  of  the 
people  in  this  nation  and  at  this  time.  Especially  must 
our  pupils  feel  deeply,  as  well  as  understand,  the  wickedness 
of  any  type  of  rule  which  would  compel  the  tyranny  of 
a  minority,  whether  of  birth  or  of  wealth,  or  of  a  proletariat, 
or  of  any  group  whatever. 

A  teacher  who  will  use  this  text  not  as  an  added  "subject" 
but  rather  as  a  comment  and  a  method  of  adjustment  of 
present  conditions  made  vivid  by  direct  local  references,  who 
will  apply  some  of  it  to  the  life  in  the  classroom  and  the 
school,  will  find  a  ready  means  of  enriching  the  composition, 
the  arithmetical  problem,  the  reading  period,  the  discussion 
of  current  events. 

An  appreciation  of  history,  and  in  some  degree  of  geography, 
can  be  facilitated  by  the  use  of  this  text  material ;  for  train- 
ing in  ethics  and  civics,  the  value  of  political  and  economic 
reference  is  obvious. 

Economics  as  a  science  has  infinite  applications,  some  of 
them  exceedingly  complex,  and  not  a  few  of  the  subject 
disagreements  among  economists  themselves.  But  it  is 
only  with  simpler  relations  that  our  children  need  be  con- 
cerned. As  they  learn  the  fundamental  principles  and  be- 
come accustomed  to  apply  them  not  only  to  school  problems, 
but  to  those  that  are  now  demanding  the  attention  of  all  of 
us,  they  will  begin  to  interpret  the  republic  not  as  document 
or  a  declaration,  but  as  a  place  where  men  and  women  may 
live  safely  and  happily  only  as  they  are  willing  to  work 
together  and  to  give  some  of  their  own  thought  and  effort 
to  welfare.  For  a  society  like  ours  cannot  indefinitely 
continue  to  survive  in  an  atmosphere  of  suspicion,  of  doubt, 
of  class  antagonism,  and  of  individual  aggrandizement. 


vi  INTRODUCTION 

It  is  possible  to  conceive  that  the  schools  of  an  autocracy 
might  be  indifferent  to  matters  political,  social,  or  economic. 
This  cannot  hold  true  of  a  democracy.  For  the  life  of  a 
democracy  depends  upon  intelligent  teamwork.  A  man's 
first  business  cannot  be  to  feather  his  own  nest,  or  to  take 
care  of  his  own  health,  or  to  provide  for  the  enjoyment  of 
his  own  leisure.  These  are  all  proper  purposes  in  the  edu- 
cational scheme,  and  all  useful  for  the  making  of  better 
citizens.  But  they  do  not  in  themselves  insure  good  citizen- 
ship. The  first  business  of  the  public  school  is  to  give  to 
pupils  that  knowledge  and  understanding,  and  to  inspire 
them  with  those  motives  which  will  make  good  citizens. 
A  pupil  cannot  be  a  good  citizen  unless  he  believes  that  he 
must  seek  his  own  welfare  only  through  the  welfare  of  the 
group  of  which  he  is  a  part,  and  unless  he  acts  upon  his 
belief.  It  is  not  wholly  a  matter  of  good  will :  it  requires 
understanding.  To  repeat,  the  important  business  of  the 
school  is  to  make  the  good  citizen.  This  first,  and  all  other 
things  may  come  after. 

Albert  Shiels. 

May,  1920. 


CONTENTS 

CHAPTER  PAGE 

I.    What  Wealth  Is i 

II.    The  Conditions  op  Wealth 7 

III.  To  Whom  Wealth  Belongs,  and  How  it  is  Drtded  15 

IV.  The  Institution  or  Property 25 

V.    Honest  Money 34 

VI.     Capital,  Credit,  and  Interest 41 

VII.    Labor  and  Competition 50 

VIII.    The  Grievances  of  the  Poor 59 

IX.    The  Abuses  and  the  Duties  of  Wealth     ...  65 

X.    Buyers  and  Sellers  ;    or,  The  Mutual  Benefit  74 
XL    Employers  and  the  Employed:    Their  Interest 

in  Each  Other 83 


ECONOMICS   FOR  UPPER 
GRADES 

CHAPTER   I 
WHAT  WEALTH  IS 

"Wealth"  has  two  meanings.  The  larger  mean- 
ing comprises  everything  which  makes  men  "  well  off." 
Thus,  a  man's  health,  his  home,  his  children,  the 
salubrious  chmate,  the  air  and  the  rain,  the  beautiful 
scenery  of  his  country,  are  a  part  of  his  wealth.  In  this 
broad  sense  the  man  who  enjoys  life  most  amply,  whether 
he  has  much  or  little  property,  is  the  most  wealthy. 
In  this  sense,  indeed,  his  best  wealth  may  not  have  any 
money  or  market  value. 

In  the  narrower  sense,  wealth  is  everything  which  has 
a  market  value,  that  is,  which  can  be  bought  and  sold. 
Houses,  ships,  lands,  wheat,  cattle,  furniture,  books  and 
pictures,  gold,  silver,  iron  —  such  things  constitute  visi- 
ble wealth,  which  we  can  see  and  touch.  If  they  were 
added  together  wherever  they  could  be  found,  they 
would  make  the  wealth  of  the  Nation. 

Natural  wealth.  —  There  is  much  that  is  often  called 
wealth  which  has  no  present  market  value.  The  fish 
on  our  shores,  the  wild  lands,  the  timber  in  Alaska,  the 
ores  in  the  mines  —  these  things  of  unknown  value  may 
sometime  be  wealth,  but  they  are  not  wealth  until  they 
can  be  bought  and  sold. 


2  RIGHTS  AND   DUTIES   OF   BUSINESS   AND   LABOR 

In  the  strict  sense  of  the  word,  man  always  creates 
wealth  —  sometimes  by  his  labor,  as  when  he  produces 
wheat  or  builds  a  house;  sometimes  by  bringing  a  thing, 
like  wild  fruit,  to  market  and  offering  it  for  sale;  and 
again  merely  by  claiming  it  as  his  own,  as  when  a  man 
fences  off  a  piece  of  land  in  the  wilderness,  or  discovers 
a  mine. 

The  public  wealth.  —  That  is  not  always  wealth  which 
costs  money.  Thus,  a  city  may  spend  millions  of  dol- 
lars in  building  sewers  or  constructing  streets.  But 
the  sewers  and  streets  are  not  strictly  wealth,  since 
after  they  are  constructed  no  one  would  pay  anything 
for  them.  There  may  be  public  works  also,  like  jails 
and  almshouses,  in  which  wealth  is  sunk.  The  need  of 
such  things  is  a  public  misfortune,  and  indicates  the 
presence  of  poverty  and  crime.  A  nation  that  had 
quite  outgrown  the  necessity  for  jails  and  almshouses 
would  be  far  richer  than  a  nation  that  had  many  costly 
buildings  of  this  sort.  A  well  man,  who  has  no  need  of 
medicines,  is  better  off  than  a  lame  or  sick  man  who  has 
to  keep  a  supply  of  crutches  and  drugs. 

Wealth  is  likewise  sunk  in  fortifications  and  war- 
ships. The  nation  would  be  richer  if  it  had  no  need  of 
them,  as  a  man  is  better  off  if  he  needs  no  pistols  to 
defend  himself. 

Wealth  in  men.  —  There  is  wealth  in  horses  or  mules, 
because  they  can  work,  and  can  therefore  be  bought  and 
sold,  or  hired.  There  was  also  wealth  in  men,  for  the 
same  reason,  under  the  system  of  slavery.  A  large  part 
of  the  property  of  a  slave  State  was  in  men.  This  kind 
of  wealth  did  not  disappear  when  the  slaves  were  made 
free;   free  men  own  themselves  instead  of  being  owned 


WHAT  WEALTH  IS  3 

by  masters.  They  can  hire  or  sell  their  labor,  their 
skill,  or  their  knowledge.  A  man  without  owning  any 
visible  wealth  may  possess  qualities  in  himself,  such  as 
experience  and  integrity,  which  will  bring  thousands  of 
dollars  a  year.  A  State  which  has  a  plenty  of  such  men 
will  have  all  the  visible  wealth  that  it  needs.  Although 
wealth  in  men,  that  is,  their  labor  and  skill,  can  be 
bought  and  sold,  so  that  a  man  with  no  money  and  a 
good  trade  is  richer  than  an  ignorant  man  with  a  thou- 
sand dollars,  yet  this  kind  of  wealth  is  not  generally 
counted.  It  is  not  shown  in  the  census  reports;  in 
fact,  it  is  not  easy  to  measure  it  in  money.  Who  can 
tell  how  much  a  bright  boy  or  girl  is  worth  ? 

Wealth  in  paper.  —  A  man  may  have  large  wealth  and 
never  see  it.  Some  of  it  may  have  been  lent  to  farmers 
or  to  help  build  warehouses  in  a  distant  city.  Some  of 
it  may  have  helped  a  company  of  men  to  build  a  mill, 
or  a  Une  of  steamers,  or  a  railroad,  in  a  new  State.  Some 
of  it  may  have  been  put  into  a  bank,  and  then  lent 
with  other  money  all  over  the  country.  Some  of  it  may 
have  been  lent  to  the  government.  Can  you  tell  where 
it  now  is?  While  the  rich  man  may  not  see  anything 
that  he  owns,  he  has  papers  which  show  the  amount 
of  his  wealth.  Some  of  these  papers  are  notes,  signed 
by  men  who  promise  to  pay  so  many  dollars;  or  mort- 
gages on  the  farmer's  house  and  land ;  or  railroad  bonds, 
which  are  notes  of  the  railroad  company;  or  certificates 
of  so  many  shares  in  the  mill  or  the  bank;  or  bonds  of 
the  government,  which  are  really  a  sort  of  mortgage 
upon  all  the  property  of  the  people;  or  paper  bills, 
which  promise  so  many  dollars  in  gold  or  silver. 

This  paper  wealth,  these  bonds  and  notes  and  certifi- 


4  RIGHTS  AND   DUTIES  OF   BUSINESS  AND   LABOR 

cates,  may  be  bought  and  sold  in  the  market,  but  they 
have  no  value  in  themselves;  the  country  would  not  be 
poorer  if  they  were  burned.  Yet  they  are  often  counted 
as  so  much  wealth.  Thus,  the  State  of  New  York  is 
said  to  have  so  many  billions  of  dollars  in  visible  wealth, 
and  so  many  billions  more  in  paper  wealth.  In  this  way 
the  same  wealth  is  often  counted  twice.  The  railroad  is 
counted  once  for  its  visible  value  in  land,  rails,  stations, 
and  cars;  and  then  it  is  counted  again  for  the  paper 
bonds  and  shares,  which  merely  show  who  its  owners 
are. 

So  with  the  mortgage  on  the  farmer's  land.  It  shows 
that  for  the  present  some  one  else  owns  part  of  the  farm. 
Perhaps  a  savings  bank  has  the  mortgage,  in  which  case 
the  depositors  in  the  bank  have  a  share  in  the  farm. 
We  have  seen  that  the  government  often  attempts  to 
tax  the  same  property,  first  as  visible  and  again  as  paper 
wealth. 

The  wealth  in  paper  may  sometimes  mean  an  addition 
to  the  real  wealth  of  a  State.  Thus  the  people  of  Great 
Britain  own  a  vast  amount  of  wealth  all  over  the  world 
in  lands  and  mines,  etc.  The  bonds  and  paper  certifi- 
cates show  that  the  people  in  other  countries  are  so 
much  in  debt  to  the  people  in  Great  Britain.  So,  also, 
the  people  of  Philadelphia  may  hold  paper  bonds  and 
shares  in  stores  and  mills  in  cities  in  the  West,  and  the 
people  oi  other  cities  may  own  land  and  buildings  in 
Philadelphia  in  the  same  way. 

False  wealth.  —  There  may  be  wealth,  or  things  which 
can  be  bought  and  sold  in  the  market,  which  harm  the 
persons  who  use  them.  Thus,  if  ardent  spirits  hurt  and 
degrade  a  community,  the  distilleries  and  saloons  used 


WHAT  WEALTH   IS  $ 

by  the  liquor  business  lessen  the  wealth  of  the  people. 
Although,  therefore,  the  national  census  of  wealth  may 
add  hundreds  of  millions  for  the  distilleries  and  saloons, 
a  true  estimate  would  subtract  this  value,  since  that 
cannot  really  be  wealth  which  does  not  in  some  way 
make  men  better  off.  It  is  like  a  vicious  animal  which 
destroys  every  year  more  than  his  value. 

How  wealth  varies. — That  wliich  is  wealth  in  one  place 
may  not  be  wealth  in  another.  An  acre  of  land  in  New 
York  City  may  be  worth  millions  of  dollars,  but  an  acre 
of  land  in  Greenland  is  worthless.  What  is  a  picture 
worth  in  Patagonia?  Wealth  depends  on  a  market, 
or  on  the  desire  of  men  to  buy  and  sell.  Even  the  same 
market  may  change  from  one  year  to  another.  Thus 
London  and  New  York  are  the  markets  of  the  world, 
where  all  sorts  of  things  are  continually  bought  and  sold. 
But,  in  case  of  a  great  disaster,  men's  desire  to  buy  and 
sell  may  suddenly  be  checked.  In  that  case  the  value 
of  many  kinds  of  wealth  falls,  though  the  things  them- 
selves remain. 

Robinson  Crusoe's  lands  and  goats,  though  precious  to 
him,  were  not  strictly  wealth  till  other  men  appeared  to 
purchase  them,  that  is,  to  make  a  market.  Even  gold 
is  not  wealth  on  a  lonely  island,  for  one  man  alone  has 
no  use  for  it. 

Wealth  is  constantly  being  destroyed,  or  used  up,  or 
worn  out.  Some  kinds,  like  food,  are  good  only  for  im- 
mediate consumption.  Clothing  lasts  a  little  longer, 
but  soon  has  to  be  renewed.  Houses  and  buildings  at 
last  go  to  decay.  The  gold  and  iron  wear  out.  Per- 
haps one  eighth  of  all  the  wealth  in  a  country  is  used 
up  in  a  single  year.    Among  a  poor  or  barbarous  people 


6  RIGHTS  AND   DUTIES  OF  BUSINESS  AND    LABOR 

the  proportion  is  larger.  The  land  is  the  one  thing 
which  remains  the  same;  but  its  fertility  may  be  ex- 
hausted, while  the  demand  for  it  is  constantly  changing. 

The  increase  of  wealth.  —  Although  wealth  is  con- 
stantly being  destroyed  or  worn  out,  it  is  also  being  re- 
created. The  harvests  of  each  year  renew  it;  the  labor 
and  skill  of  millions  of  persons  change  the  raw  products 
into  new  and  higher  values,  as  in  the  case  of  a  steel 
watch-spring,  worth  many  times  the  cost  of  the  crude 
iron  ore.  Even  the  land  may  increase  in  value  by  being 
tilled,  or  the  growth  of  a  city  may  give  each  square  foot 
of  land  a  greater  value  than  an  acre  possessed  before  the 
city  was  built.  Possibly  half  of  the  wealth  of  people 
who  live  in  cities  consists  merely  in  the  land  upon  which 
stores  and  houses  are  crowded  together.  The  greater 
the  city,  the  more  the  value  of  this  land. 

The  wealth  of  a  people  is  thus  like  the  body  of  a  man. 
It  is  in  a  state  of  constant  change  or  flux.  It  is  always 
being  renewed  or  made  over.  How  much  can  you  find 
that  has  lasted  over  fifty  years?  Thus,  again,  we  find 
that  the  skill,  the  learning,  the  energy,  the  character, 
the  ideals,  and  the  purpose  of  a  people  —  in  other 
words,  what  education  gives  —  constitute  their  real 
wealth. 


CHAPTER   II 
THE   CONDITIONS   OF  WEALTH 

If  a  household  of  children  were  rude  and  destructive, 
or  had  not  learned  how  to  use  toys  or  articles  of  furni- 
ture, it  would  be  impossible  to  keep  anything  of  value; 
they  would  have  no  wealth.  So  v/ith  a  savage  people. 
As  long  as  men  were  barbarous,  the  duties  of  business 
and  property  were  extremely  simple.  The  land  be- 
longed to  the  whole  family  or  tribe.  There  was  little 
furniture  in  the  rude  tents  or  huts  where  the  people 
lived  together  in  alternate  plenty  and  want.  There 
was  little  or  no  barter  or  exchange  of  goods,  and  no 
shops  or  merchants,  and  for  a  long  time  there  was  no 
coined  money.  The  chiefs  lived  much  like  the  common 
people,  as  is  still  the  case  among  the  American  Indians. 
As  men  came  to  live  in  cities,  life  grew  less  simple:  all 
sorts  of  luxuries  were  demanded;  various  trades  arose; 
and  there  became  everywhere  a  wealthy  class,  living 
differently  from  their  neighbors.  The  growth  of  cities 
brought  travel,  and  therefore  more  trade,  as  the 
people  of  one  place  learned  to  desire  the  things  which 
another  place  produced.  There  came  to  be  great  trad- 
ing cities,  like  Tyre  and  Carthage,  which  sent  their 
ships  beyond  the  Mediterranean  Sea. 

Unfavorable  conditions.  —  There  were  serious  ob- 
stacles, however,  in  early  times  in  the  way  of  industry 
and  commerce  and  the  amassing  of  wealth.  Some  of 
these  obstacles  continue. 

7 


8  RIGHTS  AND   DUTIES  OF   BUSINESS   AND   LABOR 

War.  —  There  was  almost  constant  war.  A  rich  city 
was  always  liable  to  be  pillaged  and  burned.  The  cara- 
vans of  merchants  were  likely  to  be  attacked  by  robbers. 
Men  had  to  defend  themselves,  or  to  obey  ambitious 
kings,  and  they  lived  close  to  the  Hne  of  famine. 

Piracy.  —  The  seas  were  infested  with  pirates,  who 
saw  no  harm  in  seizing  merchant  ships,  and  selling  their 
crews  for  slaves.  Ships  driven  on  shore  by  storm  were 
mercilessly  plundered. 

Slavery.  —  Slavery  also  obstructed  industry  and  busi- 
ness. The  slaves  did  less  work  than  free  men  could  do, 
and  the  latter  were  less  willing  to  work.  There  came 
to  be  a  class  of  idle  and  unemployed  people. 

Caste.  —  In  some  countries  also,  as  in  India  to-day, 
there  were  castes,  that  is,  classes  of  people,  the  mem- 
bers of  which  could  not  change  their  occupation.  The 
son  of  a  tanner  had  to  be  a  tanner.  Thus  bright  men 
in  the  lower  castes  were  kept  from  rising.  Ambition 
and  invention  were  checked,  and  warriors  were  thought 
to  be  better  than  workers. 

Privileges  and  monopolies.  —  Suppose  a  single  fam- 
ily owned  the  only  spring  of  water  in  a  town  and  charged 
the  others  for  the  use  of  the  water.  This  would  be  a 
monopoly.  The  old  world  was  full  of  monopolies.  The 
man  who  owns  a  valuable  copper  mine  has  a  monopoly. 
He  and  the  other  owners  of  copper  mines  possess  the 
privilege,  since  every  one  must  have  copper,  of  taxing 
all  the  people.  In  other  words,  they  have  a  power  and 
source  of  wealth  which  others  lack.  So  the  owner  of 
valuable  land,  whose  grandfather  secured  a  title  from 
the  King  of  England,  may  do  nothing  himself,  but  live 
by  the  rent  of  his  land.     When  a  country  has  many 


THE   CONDITIONS   OF   WEALTH  9 

people  who  possess  privileges  or  monopolies  which  the 
rest  of  the  people  cannot  enjoy  on  equal  terms,  there 
must  be  more  or  less  liindrance  to  free  industry  and 
therefore  to  the  growth  of  wealth.  A  few  may  be  very 
rich,  but  the  many  may  have  to  work  for  the  few.  This 
has  long  been  the  condition  of  England,  Prussia,  and 
other  countries  where  land  has  been  largely  in  the  hands 
of  the  few.  Monopoly  of  land  is  already  a  danger  in 
the  United  States. 

The  physical  conditions  of  wealth ;  the  climate.  — 
Certain  countries,  so  far  as  we  know,  have  never  had 
any  wealth.  In  the  arctic  regions,  where  the  energies  of 
man  are  nearly  exhausted  in  the  fight  with  winter,  there 
could  never  be  a  rich  civilization.  Ci\'ilization  has  not 
flourished  in  the  heart  of  Africa  or  under  the  equator. 
On  the  contrary,  the  richest  nations  dwell  in  temperate 
regions.  The  climate  of  a  country  is  one  of  the  condi- 
tions that  help  or  hinder  the  wealth  of  a  people. 

Natural  resources.  —  Certain  countries  are  poor  by 
nature.  The  soil  may  be  sterile,  fuel  may  be  scarce, 
the  supplies  of  valuable  minerals  may  be  scanty.  Other 
countries  enjoy  rich  lands,  ample  forests  and  coal  fields, 
vast  water  power,  good  harbors,  and  inexhaustible  mines. 
The  United  States  is  thus  magnificently  endowed  with 
the  materials  of  wealth.  China  is  another  such  coun- 
try which  supports  a  vast  population  of  industrious 
people. 

The  spur  of  necessity.  —  Why  is  it  that  the  beautiful 
islands  of  the  Southern  Pacific  Ocean  have  little  wealth  ? 
The  people  are  too  comfortable  to  need  to  labor.  The 
abundance  of  fruit  contents  them;  the  mild  climate  re- 
quires little  clothing  and  makes  unnecessary  the  build- 


lo       RIGHTS  AND  DUTIES  OF  BUSINESS  AND  LABOR 

ing  of  permanent  houses.  We  find  few  of  the  arts,  or 
books,  until  men  learn  to  work,  and  few  would  learn  to 
work  unless  there  were  some  necessity. 

As  soon,  however,  as  the  conditions  of  living  become 
harder  —  when  fruits  have  to  be  cultivated;  when  cold 
and  wet  demand  clothes  for  men's  bodies;  when  men 
require  shelter  and  permanent  houses  —  wealth  begins 
through  the  spur  of  necessity.  Necessity  teaches  men 
to  work,  and  all  work  requires  more  work  to  perfect  and 
secure  it.  The  field  once  tilled  has  to  be  fenced  or  pro- 
tected from  wild  creatures;  the  house  has  to  be  en- 
larged and  improved;  appliances  are  invented  to  save 
labor,  and  the  inventions  in  turn  demand  new  kinds  of 
labor  and  new  appliances,  that  is,  more  wealth.  The 
introduction  of  the  telephone  into  a  town  requires  an 
increased  force  of  men  and  women  to  manage  the  busi- 
ness, and  the  increasing  numbers  require  more  houses 
and  more  telephones.  Even  the  effort  to  save  labor 
presently  calls  for  new  forms  of  labor  and  produces 
more  wealth. 

The  necessity  to  labor  at  first  seems  to  be  a  misfor- 
tune. The  long,  cold  winter  requires  fuel  and  hay, 
and  more  labor  to  supply  these  necessaries.  A  consid- 
erable portion  of  all  wealth  consists  in  wood,  coal,  hay, 
and  substantial  buildings,  which  the  rigor  of  the  climate 
demands. 

Everything  that  men  esteem  precious  thus  arises  from 
some  kind  of  necessity,  either  real  or  imaginary.  The 
need  of  bread  or  shoes  or  tools  stirs  them  to  work  to 
overcome  the  need,  and  thus  to  grow  rich.  Would  you 
not  rather  live  in  the  United  States  and  have  to  work 
foi'  your  living,  than  to  live  a  lazy  life  in  Tahiti? 


THE   CONDITIONS   OF  WEALTH  ii 

Intellectual  conditions ;  enterprise  or  energy.  —  There 
are  some  races,  and  certain  persons  in  every  race,  who 
are  more  easily  contented  or  more  indolent  than  others. 
They  do  not  keenly  feel  the  spur  of  necessity.  One 
condition  of  wealth,  therefore,  is  energy  or  enterprise 
or  will.  The  enterprising  farmer  will  work  more  hours 
in  a  day,  take  better  care  of  his  cattle,  provide  warmer 
buildings,  fertilize  his  land,  and  grow  rich  by  his  labor. 
The  joy  of  life  consists  largely  in  doing  things,  in  crea- 
tion, in  working  out  plans. 

Intelligence.  — -  An  ignorant  people  have  few  wants, 
and  therefore  little  wealth.  An  ignorant  people  could 
not  have  invented  the  steam  engine,  neither  would  they 
have  felt  the  need  for  the  articles  which  the  steam 
engine  helps  to  produce.  It  is  only  when  the  intelH- 
gence  of  a  people  rises  to  demand  a  vast  supply  of  many 
things,  that  the  new  necessity  urges  inventors  to  harness 
the  forces  of  nature  to  help  them  in  shops,  mills,  and 
railroads.  The  single  invention  of  the  steam  engine, 
called  forth  by  intelligence,  has  increased  the  wealth  of 
the  world  in  a  century  more  than  it  had  grown  in  a 
thousand  years.  Science  constantly  brings  to  view  new 
sources  of  wealth. 

Taste.  —  A  certain  portion  of  wealth  is  for  enjoyment 
or  decoration.  Pictures,  statues,  beautiful  buildings, 
instruments  of  music,  the  products  of  the  various  arts, 
constitute  this  kind  of  wealth.  It  arises  from  higher 
kinds  of  need,  as  men  want  satisfaction  for  their  sense 
of  beauty.  As  soon  as  a  people  have  learned  how  to 
provide  a  sufficient  quantity  of  food  and  clothing,  a 
larger  number  of  their  skilled  workmen  are  set  free  to 
produce  and  to  cheapen  the  articles  of  taste. 


12         RIGHTS  AND    DUTIES   OF   BUSINESS   AND   LABOR 

A  multitude  now  have  pictures,  books,  and  pianos, 
which  once  the  few  rich  people  could  hardly  obtain. 
The  more  taste  people  have,  the  larger  is  the  produc- 
tion of  this  form  of  wealth.  The  call  for  works  of  art, 
taste,  comfort,  and  luxury  requires  more  shops  and 
houses,  that  is,  greater  wealth  of  other  kinds.  Even 
the  taste  for  natural  scenery  adds  a  new  value  to  rocky 
hills  and  wild  shores,  for  which  persons  without  taste 
would  see  no  use. 

Moral  conditions:  honesty. — There  are  certain  moral 
conditions  of  wealth.  There  will  be  little  wealth  if 
thieves  and  robbers  are  abroad.  For  men  will  not  labor 
and  gather  abundance,  if  their  riches  are  immediately 
snatched  away  from  them.  Neither  will  they  have  the 
heart  to  work,  if  the  government  is  dishonest  and  takes 
their  savings  ruthlessly,  as  most  governments  used  to  do. 

Good  faith  or  trust.  —  Wealth  is  daily  changing  hands. 
A  vast  portion  of  business  consists  in  trade.  Wool,  cot- 
ton, and  wheat  must  be  brought  from  distant  States  and 
manufactured  articles  returned.  But  trade  is  impos- 
sible unless  men  trust  each  other.  Trade  is  carried  on 
in  the  faith  that  men  will  do  as  they  promise,  that  they 
will  pay  for  what  they  buy,  that  they  will  furnish  arti- 
cles as  good  as  they  promise.  Even  a  few  men  who 
break  their  word  injure  business,  cause  distrust,  and 
compel  higher  prices  which  the  honest  have  to  pay. 
On  the  other  hand,  if  all  men  keep  their  word,  more 
business  can  be  done,  at  cheaper  rates,  and  every  one 
can  have  more  wealth.     We  all  gain  or  suffer  together. 

A  state  of  peace.  —  When  the  early  colonists  were  at 
war  with  the  French  and  Indians,  their  cornfields  and 
towns  were   often  burned   and   their    ships   captured. 


THE   CONDITIONS   OF   WEALTH  13 

They  could  not  make  wealth  in  time  of  war.  But  as 
soon  as  peace  returned,  the  French  and  the  Indians 
helped  them  to  get  more  wealth.  The  Indians  brought 
them  furs,  and  took  cloth  and  iron  in  return.  Their 
ships  sailed  to  France,  and  both  the  French  and  the 
Americans  profited  by  trading  together.  The  Ameri- 
cans sold  their  furs  and  salt  fish,  of  which  they  had 
more  than  they  needed,  and  bought  from  France  silk 
and  other  articles,  such  as  the}^  could  not  make  so  well 
as  the  Frenchmen.  Trade  made  more  wealth  in  both 
countries,  but  trade  depended  on  the  nations  being  at 
peace. 

Courage.  —  Sometimes  vast  amounts  of  wealth  are 
suddenly  swept  away,  as  by  a  fire  or  a  flood.  These 
are  the  occasions  for  courage,  not  only  at  the  time,  but 
afterwards,  when  men  must  go  to  work  to  repair  the 
damage  or  to  rebuild  a  new  and  better  city  from  the 
ruins,  as  the  men  of  Chicago  did  after  the  great  fire  of 
187 1.  In  various  industries,  in  the  management  of 
steam  and  electricity,  on  railroads  and  on  ships,  there 
is  daily  demand  for  the  same  kind  of  daring  to  take 
necessary  risks  and  even  to  brave  death,  as  used  to  be 
called  for  in  the  hazards  of  battle. 

In  general,  when  men  are  friendly  with  each  other, 
when  their  ships  sail  freely  into  all  seas  and  foreign 
nations  welcome  each  other  to  their  ports;  when  many 
travelers  go  from  one  country  to  another  and  see  what 
others  can  do  better  than  they,  this  friendly  travel  and 
interchange  help  to  make  wealth.  Men  who  see  beau- 
tiful works  of  art  return  home  with  fresh  zest  for  their 
own  work.  Men  desire  foreign  fruits  and  products,  — 
tea  and  coffee,  pineapples   and   bananas  —  and   bring 


14        RIGHTS   AND   DUTIES   OF   BUSINESS  AND  LABOR 

them  to  our  markets.  New  ships  and  steamers  must  be 
built  to  carry  the  trade  of  the  world;  new  warehouses 
must  be  erected  to  accommodate  the  growing  trade; 
more  fields  must  be  tilled  and  more  mills  built  to  make 
things  with  which  to  pay  the  people  over  the  sea  for 
what  they  send  us.  Wealth  not  only  rests  upon  good 
faith  and  friendliness,  but  the  getting  of  wealth  brings 
distant  peoples  together,  and  teaches  them  to  trust 
each  other  rather  than  to  fight.  We  see  thus  how  the 
whole  world  may  some  day  become  a  cooperative  Com- 
monwealth. 


CHAPTER   III 

TO    WHOM    WEALTH   BELONGS,    AND    HOW 
IT    IS    DIVIDED 

Labor  alone  does  not  make  wealth,  as  some  think. 
Wealth  is  partly  natural,  as  the  land,  the  fisheries,  and 
the  ores  in  the  mines.  Intelligence,  skill,  and  taste  are 
also  necessary  in  creating  and  managing  it.  Public 
order  is  necessary;  honest,  industrious,  and  faithful  men 
are  necessary.  If  religion  enhances  the  worth  of  human 
life,  or  furnishes  motives  for  noble  conduct,  it  also  shares 
in  creating  wealth.  Property  is  worth  more  in  the 
United  States,  with  its  schools,  benevolent  institutions, 
and  churches,  than  in  Morocco  or  Siberia. 

The  useful.  —  If  a  colony  of  persons  were  to  settle  for 
the  first  time  in  a  new  country,  and  take  up  land  and 
build  towns,  their  wealth  would  rightfully  belong  to  all 
who  had  been  in  any  way  useful  to  the  colony.  None 
of  it  would  strictly  belong  to  the  idle,  to  the  wasteful,  to 
the  injurious,  if  such  were  among  the  colonists.  There 
are  in  every  community  various  divisions  of  the  useful, 
who  ought  to  share  in  the  wealth  according  to  the  part 
which  they  play  in  making  it. 

Discovery  or  invention.  —  In  a  new  colony  there  are 
certain  persons  who  go  out  as  pioneers  or  scouts  to 
discover  the  natural  wealth,  the  fertile  lands,  the  fruits, 
the  minerals,  the  springs,  and  waterfalls.  If  they  do 
nothing  but  discover,  and  tell  others  where  to  go,  they 

15 


1 6        RIGHTS   AND   DUTIES   OF   BUSINESS   AND   LABOR 

deserve  their  share  in  the  wealth  which  results  from  the 
discovery. 

The  inventors  are  like  the  discoverers.  Whoever  shows 
a  new  use  to  which  iron  or  copper  can  be  put  is  as  useful 
as  if  he  discovered  a  new  mine.  Whoever  invents  a  proc- 
ess or  a  machine  to  save  labor,  that  is,  to  set  workmen 
'ree  to  do  something  else,  to  shorten  the  working-da}', 
or  to  enhance  the  enjoyment  of  men's  leisure,  may  be 
more  useful  than  a  thousand  workmen. 

Production.  —  The  larg'^st  part  of  the  working-force  of 
the  community  must  be  employed  in  producing  food  and 
all  kinds  of  supplies.  There  must  be  farmers,  black- 
smiths, carpenters  and  operatives  in  shops  and  mills,  to 
make  boots  and  shoes,  clothing,  tools,  etc.  Whoever 
produces  something  useful  for  the  community  ought  to 
have  a  share  in  the  wealth.  Artists  and  painters  belong 
under  this  head,  if  they  add  to  the  happiness  of  the  com- 
munity. The  domestic  work  done  by  women  comes 
under  the  same  head.  The  woman  who  cooks  the 
man's  food,  or  repairs  his  clothing,  is  as  useful  as  the 
farmer  who  reaps  the  wheat. 

We  observe  various  degrees  of  usefulness  in  men,  from 
those  who  work  by  thousands  with  their  hands  to  the 
highly  skilled  artisans,  of  whom  there  are  never  enough 
in  a  town.  So  among  the  workers  of  each  kind  we  see 
difference  of  usefulness  and  worth,  from  those  who  labor 
awkwardly  or  without  any  interest,  who  waste  the  ma- 
terial and  spoil  the  tools,  up  to  the  intelligent,  effective, 
and  enthusiastic  men  and  women,  one  of  whom  can  do 
three  times  as  much  in  a  day  as  his  neighbor  does. 

The  work  of  distribution.  —  It  often  happened  in  the 
old  times  that  there  would  be  plenty  of  food  in  one 


THE  DIVISION   OF   WEALTH  17 

place,  while  men  were  starving  a  hundred  miles  away. 
The  farmer  had  no  good  roads  over  which  to  take  his 
produce  to  market.  In  a  civilized  country,  thousands  of 
persons  do  nothing  else  but  help  distribute  supplies. 
The  grocers  do  this  on  a  small  scale  in  every  village. 
The  great  merchants  do  it  by  wholesale  in  the  cities. 
Their  agents  travel  up  and  down  through  the  country, 
buying  and  selling. 

Transportation.  —  Railroads  and  steamships,  together 
with  hosts  of  teamsters  and  draymen,  chstribute  the 
vast  products  of  the  Nation.  Our  railroads  carry  more 
than  a  billion  tons  of  freight  in  a  year.  Express  com- 
panies handle  the  more  precious  or  perishable  goods; 
the  parcel  post  helps  to  bring  butter  and  eggs  to  city 
homes.  The  farmer  need  not  now  stop  working  in 
order  to  go  to  market  wdth  his  wheat.  Millions  of 
passengers  must  also  be  carried,  chiefly  to'  their  work 
and  business,  but  also  for  pleasure.  An  army  of  men 
are  detailed  for  conductors  and  brakemen,  who  also 
deserve  to  share  in  the  wealth  of  the  country.  Horses 
and  stables,  automobiles  and  garages,  must  be  kept  and 
more  men  employed  to  take  care  of  them. 

Protection.  —  The  dut}-  of  protecting  against  violence 
and  fire  cannot  be  altogether  committed  to  the  govern- 
ment. There  must  be  private  watchmen  in  stores  and 
mills.  There  must  be  patrols  on  the  railroads  to  pre- 
vent accident.  Whoever  prevents  injury  ought  to  share 
with  those  who  produce  the  wealth.  The  physicians 
and  nurses,  who  defend  us  against  disease,  claim  a  right- 
ful share. 

Administration  and  accounts.  —  The  business  of  the 
community  needs  a  certain  class  of  skilled  men  to  manage 


1 8        RIGHTS   AND   DUTIES   OF   BUSINESS   AND   LABOR 

and  direct.  The  able  management  of  a  first-rate  en- 
gineer, architect,  or  superintendent  may  save  the  labor 
of  hundreds  of  men,  wliile  poor  and  shiftless  management 
daily  causes  enormous  loss.  The  administration  of 
business  needs  also  a  force  of  accountants,  stenographers, 
and  bookkeepers  in  offices,  factories,  banks,  and  ware- 
houses. There  must  be  trained  heads  to  superintend 
accounts  and  make  a  multitude  of  figures  tell  the  truth, 
or  else,  through  error  or  fraud,  injustice  will  somewhere 
be  done,  or  suppUes  will  not  be  properly  distributed. 

Economy ;  savings.  —  Economy  is  the  care  of  values. 
There  are  numberless  holes  or  leaks  through  which 
wealth  is  wasted  by  ignorance  or  carelessness.  Whoever, 
therefore,  saves  wealth,  whoever  stops  the  leak,  whoever 
keeps  what  another  would  lose,  becomes  a  helper  to  the 
Nation.  A  housekeeper,  for  instance,  may  save  enough 
food,  which  another  would  throw  away,  to  feed  one  or  two 
mouths.  This  is  the  same  as  producing  the  food.  The 
larger  one's  responsibility  is,  the  greater  the  opportunity 
for  wise  economies,  saving  perhaps  billions  in  value  to  the 
Nation  and  making  every  one  better  off.  This  is  con- 
servation. 

Instruction.  —  There  must  be  plenty  of  persons  de- 
tailed to  the  service  of  education.  Whoever  teaches,  or 
waits  on  the  teacher,  or  learns  the  facts  of  nature  or 
history,  or  makes  books,  helps  make  wealth  and  deserves 
a  share  in  it.  There  must  also  be  libraries  and  museums 
with  their  attendants.  So  too,  whoever  teaches  the 
laws  of  faithful  conduct,  or  the  principles  of  a  humane 
religion,  so  as  to  help  men  become  more  just,  patient, 
brave,  and  friendly,  is  a  worker  and  sharer  with  the  direct 
producers  of  wealth. 


THE   DIVISION   OF   WEALTH  tg 

Comfort.  —  A  man  who  has  a  comfortable  house  or 
lodgings  will  do  more  work  than  if  he  is  badly  housed. 
In  a  civilized  country  numerous  appliances  exist  purely 
for  comforl.  A  large  part  of  woman's  work  is  to  promote 
and  increase  comfort.  In  general,  whoever  can  help 
make  men  more  comfortable  at  their  work,  or  in  their 
homes,  whoever  can  lessen  drudgery  and  render  labor 
more  pleasant,  deserves  a  share  in  the  wealth. 

Recreation.  —  Every  one  needs,  not  merely  rest,  but 
sometimes  amusement  or  play.  Men  who  work  hard, 
like  children  who  study,  need  vacation;  they  will  do 
more  if  they  have  it.  Here  is  the  need  of  another  body 
of  workers,  some  of  them  to  carry  on  work  wliile  the  first 
set  have  their  rest;  others  to  entertain  and  amuse. 
Extra  cars  and  steamboats  must  be  run  for  hoKdays  and 
picnics;  we  must  have  musicians,  singers,  and  actors; 
there  must  be  hotels  and  restaurants.  The  producers 
must  turn  out  a  larger  supply  of  goods  so  as  to  share  with 
those  who  give  them  recreation. 

Personal  and  domestic  service.  —  There  are  persons 
who  need  help  and  service.  Some  of  them  are  sick  or 
aged,  and  cannot  help  themselves.  Others  are  tired  or 
overworked  and  require  temporary  assistance.  In  many 
households  extra  help  is  needed  for  the  Uttle  children. 
There  are  also  those  whose  time  is  extremely  valuable 
in  behalf  of  the  nation.  Would  you  have  a  great  en- 
gineer Hke  de  Lesseps,  a  scientist  like  Darwin,  an  in- 
ventor like  Edison,  a  wonderful  painter  or  singer,  the 
President  of  the  United  States,  wasting  his  time  and 
strength  in  sawing  wood  or  shoveling  coal  ?  We  are  glad 
to  allow  certain  persons  extra  service,  provided  they  need 
it,  or  by  reason  of  the  superior  value  of  their  work. 


20         RIGHTS   .\ND   DUTIES   OF   BUSINESS   AND   LABOR 

We  grudge  this  kind  of  help,  however,  where  it  is  not 
needed  or  deserved.  We  grudge  it  to  a  young  person  who 
had  better  wait  on  himself  than  be  waited  on  by  another. 
We  grudge  it  to  the  indolent,  who  are  harmed  by  it.  In 
the  new  colony  which  we  have  imagined,  in  which  we 
should  need  every  skillful  hand,  we  cannot  see  why  an 
idler  or  his  valet  should  share  in  the  wealth  created  by 
the  useful  people. 

Luxuries.  —  There  are  articles  like  sweetmeats  or 
jellies  of  which  there  are  not  enough  to  go  around,  or  at 
least  not  for  common  use.  Because  they  are  compara- 
tively scarce  they  are  more  costly  than  the  necessaries  or 
comforts,  of  which  there  may  be  enough  for  all.  Many 
luxuries  depend  upon  the  cultivation  of  people's  fancy  or 
taste,  and  are  not  luxuries  at  all  to  those  whose  taste  is 
not  cultivated.  A  gem  or  a  work  of  art  might  not  be  a 
luxury  to  a  savage.  There  are  luxuries  which  seem  suit- 
able for  a  feast,  when  we  entertain  friends,  which  would 
not  be  wholesome  for  ordinary  use.  There  are  other 
luxuries  which  we  set  apart  for  the  sick  or  the  aged,  the 
use  of  which  might  be  enervating  for  the  young  and 
healthy. 

We  have  spoken  of  the  need  of  extra  personal  services, 
in  order  to  save  valuable  time  or  life.  There  are  other 
luxuries,  like  travel  abroad,  or  big  houses,  or  horses  and 
carriages,  or  costly  dress,  wliich  we  cheerfully  allow  to 
men  and  women  whose  Hves  are  specially  useful,  who 
require  spacious  rooms  for  study  and  books,  who  repre- 
sent the  hospitahty  of  a  city  to  distinguished  strangers, 
or  whose  services  may  be  prolonged  by  extra  care.  In 
other  words,  there  may  be  Hves  for  which  the  com- 
munity does  well  to  make  special  provision  and  give 


THE  DIVISION  OF  WEALTH  21 

ample  salaries,  as  we  give  particular  care  to  rare,  valuable, 
or  delicate  tools.  What  shall  we  say,  however,  of  those 
who  are  lavish  in  their  use  of  luxuries,  when  the  neces- 
saries of  life  are  scarce  and  costly  ?  The  empire  of  Rome 
was  on  the  way  to  ruin  while  the  rich  rioted  in  luxury  and 
the  poor  starved. 

The  family.  —  A  considerable  part  of  woman's  work 
must  be  directly  for  the  family,  and  particularly  in  the 
nurture  of  children.  The  health,  the  morals,  and  the 
working  power  of  a  people  are  high  or  low  in  proportion 
to  the  character,  the  care,  and  the  wisdom  of  its  mothers. 
Whoever  takes  care  to  make  the  children  stronger  or 
better  deserves  a  share  of  the  wealth.  The  saving  of  a 
single  delicate  child,  like  Sir  Isaac  Newton,  may  con- 
tribute to  the  State  more  than  money  can  pay  for. 

The  division  of  labor.  —  In  a  poor  or  uncivilized  coun- 
try the  same  person  carries  on  various  kinds  of  work. 
The  farmer  is  liis  own  carpenter  and  blacksmith;  spin- 
ning and  weaving  go  on  in  the  same  house.  As  fast  as 
men  learn  to  help  one  another,  they  divide  their  work 
into  trades  and  professions,  so  that  each  shall  do  what 
he  can  do  best.  Thus  each  useful  worker  fits  into  his 
proper  place  and  the  total  product  is  increased. 

It  is  possible  to  carry  this  di\'ision  of  labor  too  far. 
We  do  not  Hve  to  produce  w^ealth,  but  we  produce  wealth 
in  order  to  live  better,  that  is,  more  happily.  It  cannot 
be  good  for  a  man  to  become  a  machine  and  to  do 
nothing  all  day  but  poKsh  the  heads  of  pins.  If  he  does 
this  for  part  of  the  day,  give  him  also  opportunity  to 
work  in  his  garden  and  to  see  his  fruit  and  flowers  grow. 

The  division  of  wealth.  —  We  have  seen  that  wealth 
ought  strictly  to  belong  to  all  who  are  useful  to  the 


2  2         RIGHTS   AND   DUTIES   OF   BUSINESS   AND   LABOR 

community.  How  shall  we  apportion  it  exactly  ?  Some 
men  are  more  useful  than  others.  Some  are  useful  for 
a  time  and  less  useful  afterwards.  Some  have  greater 
needs  than  others.  An  artist,  a  student,  an  architect 
has  needs  different  from  a  farmer.  We  cannot  tell 
precisely  how  useful  one  is  as  compared  with  another. 
A  distiller  of  strong  drink  may  not  be  useful  at  all.  A 
skillful  teacher  may  be  more  useful  than  anyone  knows. 
Good  fortune  may  increase  or  lessen  the  usefulness  of 
the  farmer  or  the  fisherman.  No  tribunal  of  men  is  wise 
enough  justly  to  divide  ihe  income  or  the  wealth  of  a 
people.  It  would  not  be  fair  to  divide  equally,  for  all  do 
not  work  equally  hard,  or  need  the  same  amount.  Even 
at  the  same  table  one  eats  more  than  another.  It  would 
not  be  just  to  let  each  take  what  he  wishes;  for  many, 
like  young  children,  are  greedy  and  wasteful.  If  a  city 
or  country  contrived  to  divide  its  income  equally  among 
its  citizens,  what  should  in  fairness  be  done  with  the 
people  who  would  immediately  flock  in  from  poorer 
or  barbarous  countries  to  share  in  the  wealth  of  the 
richer  place  ? 

The  law  of  supply  and  demand.  —  The  way  in  wliich 
wealth  is  now  roughly  apportioned  js  according  to  the 
rule  of  supply  and  demand.  If,  for  example,  coal  is 
scarce,  and  the  demand  for  coal  is  great,  the  natural 
rule  is  that  a  man  must  work  more  hours,  that  is,  pay 
more  to  get  his  share  of  the  coal.  If  flour  is  abundant, 
less  labor  will  buy  it  and  there  will  be  more  time  to  pro- 
vide other  things.  If  carpenters  are  numerous  and 
farmers  are  few,  the  carpenters'  pay  will  be  small;  that 
is,  they  can  have  less  flour  or  coal,  or  whatever  else  they 
need.     If,  on  the  other  hand,  there  are  few  carpenters, 


THE   DIVISION  OF   WEALTH  23 

and  every  one  wants  their  work,  they  will  have  large 
pay. 

The  law  of  supply  and  demand  works  on  the  play- 
ground as  well  as  in  the  market.  If  there  are  few  boys 
to  play  on  the  school  team,  even  poor  players  are  wel- 
come; if  there  are  plenty  of  boys,  the  poorer  players 
have  to  stand  aside,  or  make  up  a  team  by  themselves. 

The  law  of  supply  and  demand  discovers  some  articles 
to  be  more  useful  or  valuable  than  others,  and  certain 
men  and  women  to  be  more  useful  than  others.  It  works 
to  bring  the  less  valuable  things  within  reach  of  every 
one,  but  makes  the  scarcer  things,  like  luxuries,  expen- 
sive. It  gives  to  the  many  persons  whose  work  is  less  in 
demand,  or  less  useful,  whose  places  could  readily  be 
filled,  less  of  the  wealth,  and  more  of  it  to  those  who  are 
specially  necessary  to  create  the  wealth.  Men  have  not 
yet  found  any  other  rule  than  this  by  which  to  divide 
wealth. 

The  law  of  supply  and  demand  is  a  law  of  things,  not 
of  men.  Like  the  fire  or  the  steam,  it  makes  no  allow- 
ance for  men's  feeHngs  and  needs.  The  law  of  gravita- 
tion does  not  protect  a  falling  body  from  hurt;  so  the 
law  of  supply  and  demand  by  itself  does  not  save  men 
from  starving.  It  works  out  only  a  rude  kind  of  justice. 
But  mere  justice,  without  sympathy,  pity,  consideration, 
and  friendliness,  is  harsh  and  often  cruel. 

'*  Laisses  fairs. "'  — These  French  words  mean:  "  Let 
things  take  their  course,"  or  "  Let  the  law  work  itself 
out."  Thus  hard-headed  men  say,  "Let  the  rule  of 
supply  and  demand  alone;  do  not  meddle  with  it." 
But  we  do  not  let  a  river  take  its  course;  we  try  to  con- 
trol it.    We  construct  airships  and  fly  in  the  face  of 


24        RIGHTS  Am)   DUTIES   OF   BUSINESS  AND   LABOR 

gravitation.  So  we  cannot  bear  to  let  the  law  of  supply 
and  demand  work  out  starvation  for  our  neighbors.  We 
have  to  learn  to  use  and  control  it.  In  fact  men  interfere 
with  it  constantly  for  sellish  ends.  They  pass  tariff 
laws  and  inheritance  laws  which  prevent  the  natural 
working  of  the  law  of  supply  and  demand.  Government 
exists  to  help  and  protect  its  weaker  members,  not  to 
help  the  strong  to  get  or  keep  more  than  their  share. 
The  modern  commonwealth  therefore  proposes  to  supple- 
ment the  law  of  supply  and  demand  by  a  watchful 
humanity. 

As  on  the  ball  ground  the  better  and  stronger  fellows 
try  to  make  room  for  the  poorer  and  younger,  and  to 
teach  them  to  play  better,  so  it  is  part  of  the  business  of 
the  abler  and  stronger  men  in  a  State  to  make  room  for 
the  less  capable  and  intelligent  and  to  enable  all  to 
prosper.  We  shall  speak  further  of  supply  and  demand 
in  another  chapter. 


CHAPTER   IV 
THE  INSTITUTION   OF  PROPERTY 

We  can  imagine  a  people  holding  their  wealth  in  com- 
mon, as  a  club  of  schoolboys  own  their  bats  and  balls 
together.  Among  a  savage  people  like  the  North  Ameri- 
can Indians,  a  considerable  part  of  the  wealth  is  common. 
The  tribe  holds  the  cornfields.  When  game  is  taken,  all 
the  villagers  share;  a  number  of  families  will  often  live 
in  the  same  house.  As  long  as  anyone  has  food,  his 
neighbors,  or  even  strangers,  will  come  and  eat. 

Difficulties  in  holding  wealth  in  common.  —  There 
can  never  be  much  wealth  in  a  savage  tribe.  There  is 
little  encouragement  to  enterprising  members  of  the 
tribe  to  work  hard  and  lay  up  stores  of  provisions,  where 
the  lazy  and  improvident  come  in  freely  to  devour  and 
waste.  Few  would  build  new  and  better  houses,  or  take 
the  trouble  to  have  a  nice  garden,  or  to  plant  orchards, 
unless  they  could  hope  to  enjoy  the  reward  of  their  work. 
Men  who  hold  things  in  common  are  like  children  placing 
with  blocks.  No  child  can  build  up  while  the  others 
pull  down.  No  considerable  work  can  be  carried  on 
where  people  have  no  sense  of  responsibility.  Now,  the 
best  way  to  learn  responsibility  is  to  trust  to  each  his 
own  task  or  office  or  tools  or  garden. 

The  beginnings  of  property.  —  Property  is  that  which 
is  one's  own,  which  no  other  person  has  a  right  to  take 
away.  Property  begins  even  among  savages,  as  it  begins 
among  children.     Thus  one's  clothes  are  one's  own.     It 

25 


26         RIGHTS  AND  DUTIES  OF  BUSINESS  AND   LABOR 

would  be  inconvenient  for  more  than  one  person  to  claim 
the  same  clothes.  So  of  one's  implements  and  weapons, 
the  axe  or  the  bow  and  arrows,  especially  such  as  one 
makes  himself.  So  of  the  ornaments  and  decorations, 
the  shells  or  gems,  or  bits  of  metal  that  one  finds. 
"  These  are  mine,"  says  the  child,  and  every  one  recog- 
nizes the  child's  right  to  them.  So  of  the  Arab's  horses, 
which  he  has  reared  and  tended,  or  the  flocks  which  he 
pastures. 

Differences  of  men  in  tastes  and  capacity.  —  Property 
grows  out  of  our  differences  of  taste  and  capacity.  One 
is  fonder  than  another  of  shells  or  bright  colors,  and 
takes  more  trouble  to  collect  them.  One  cares  more 
than  another  for  horses  or  cattle,  and  has  better  success 
in  raising  them.  One  is  fond  of  ornaments,  and  carves 
a  beautiful  handle  for  his  axe  or  knife,  while  another  does 
not  think  the  carving  worth  while.  The  ornamented 
axe  is  the  property  of  the  man  who  had  the  taste  and  skill 
to  make  it.  One  man  loves  books  and  pictures,  and  is 
wilHng  to  work  a  longer  day  to  obtain  them.  They 
ought  to  be  his,  rather  than  another's  who  does  not  care 
for  them. 

Property  by  earning.  —  Suppose  that  a  man  enjoys 
working  for  some  one  else  who  will  direct  his  work.  A 
man  with  a  herd  of  cattle  hires  him  to  help  take  care 
of  them,  and  pays  him  in  cattle  or  skins  or  money. 
Here  is  property  in  what  a  man  earns  by  his  labor  or 
skill.  It  rightly  belongs  to  the  man  who  has  worked  for 
it,  and  not  to  others  who  have  not  worked.  Would  it 
not  promote  laziness  in  the  men  who  did  riot  work,  if  the 
cattle  or  the  money  for  which  another  had  worked  were 
shared  with  them? 


THE   INSTITUTION  OF   PROPERTY  27 

Property  by  exchange.  —  Suppose  the  man  with  the 
herd  of  cattle  exchanges  some  of  his  steers,  or  some  gems 
that  he  has  found,  for  a  supply  of  wheat.  This,  too,  is 
his  property.  It  could  not  rightly  belong  to  others  who 
sat  still  and  did  not  help  pay  for  the  wheat.  It  would 
hurt  their  character  to  claim  what  they  had  not  helped 
to  produce. 

Property  by  gift  or  inheritance.  —  It  is  surely  fair  for 
the  man  who  has  wheat  or  horses  to  make  a  gift  to  his 
friend  or  his  son.  The  gift  then  becomes  the  property 
of  the  friend,  and  not  of  anyone  else.  Much  wealth  is 
thus  handed  down  from  parents  to  cliildren,  and  belongs 
to  the  children  by  inheritance.  May  it  not,  however, 
be  possible  that  our  laws  give  extravagant  protection  to 
property  of  this  sort? 

Property  by  natural  genius.  —  Suppose  a  man  has 
genius  to  invent  a  useful  machine,  or  to  write  a  valuable 
book,  or  he  has  a  beautiful  voice,  or  he  plays  the  violin. 
What  anyone  can  make  or  do  is  his  property  in  the  same 
way  as  his  eyes  or  his  hands  are  his  own.  It  would  not 
be  right  for  the  family  or  the  Nation  to  claim  this  man's 
genius,  or  compel  him  to  write  books,  or  to  sing  for  them 
whenever  they  pleased.  The  rewards  or  the  pay  which  he 
receives  in  return  for  his  genius  are  fairly  his.  Others 
have  no  claim  to  compel  him  to  divide  with  them. 
Nor  would  it  be  honorable  .to  make  such  a  claim.  On 
the  other  hand,  would  it  not  be  shameful  in  him  to  with- 
hold the  gifts  of  his  genius,  or  to  extort  unreasonable 
pay? 

Property  by  accident  or  good  fortune.  —  If  a  fisherman 
has  a  lucky  catch,  we  say  it  is  his.  The  unlucky  fisher- 
men, or  those  who  do  not  go  fishing,  have  no  claim  to 


28         RIGHTS   AND  DUTIES   OF   BUSINESS  AND   LABOR 

share  his  good  fortune.  Let  them  take  their  turn  at 
fortune  another  time.  Men  enjoy  their  fishing  better, 
and  they  are  more  watchful  and  daring  than  they  would 
be  if  their  fish  were  taken  from  them  and  divided  among 
the  neighbors. 

Suppose,  however,  the  man  finds  a  gold  mine.  Ought 
it  wholly  to  belong  to  him  ?  He  merely  found  what  he 
never  created.  Is  it  not  enough  if  we  make  good  to  him 
for  his  lucky  discovery,  and  then  take  the  mine  for  the 
use  of  the  State?  Would  not  a  good  citizen  prefer  this 
disposal  of  the  mine  ? 

What,  now,  if  a  man  has  property,  such  as  wheat,  or 
bank  stock,  which  rises  suddenly  in  value.  We  call  this 
increase  his  property,  although  he  may  have  done  nothing 
to  earn  it.  Since  he  has  to  bear  the  loss  when  his  wheat 
or  his  stock  falls  in  value,  it  is  right  that  he  should  enjoy 
the  exceptional  advantage  when  the  value  rises.  In  the 
long  run,  he  is  apt  to  lose  as  much  as  he  gains  in  this  way. 

Suppose,  however,  a  man's  land  rises  steadily  in  value, 
while  he  does  nothing  to  add  to  its  usefulness?  This 
happens  in  a  growing  town  or  a  new  commonwealth. 
People  pour  into  the  town  who  need  land  and  farms. 
The  land  owes  its  increase  of  value  to  the  coming  of 
these  new  people.  Does  a  good  citizen  wish  to  grow 
rich  in  this  lazy  way,  without  giving  any  service  for  what 
he  gets,  or  sharing  the  increased  value  with  his  fellow 
townsmen  ? 

Property  by  possession.  —  Suppose  one  found  some  of 
Captain  Kidd's  treasure :  it  would  be  impossible  to  re- 
store it  to  its  rightful  owners;  it  would,  therefore,  be 
the  property  of  its  discoverer  rather  than  of  any  other 
man.     So,   also,    in   case   one  had  inherited  property 


THE   INSTITUTION   OF   PROPERTY  29 

from  an  ancestor,  who  had  made  his  money  by  fraud, 
or  by  the  African  slave  trade.  It  would  still  be  the  man's 
property,  since  no  others  could  rightly  claim  it.  Would 
it  not,  however,  be  fair  if  the  Government  levied  a  heavy 
tax  on  such  pieces  of  property  as  these  ? 

Property  in  land.  —  Such  property  as  may  be  removed 
—  clothes,  furniture,  ornaments,  cattle,  produce,  money, 
etc.  —  is  called  personal  property.  This  includes  paper 
and  certificates  of  property,  such  as  bonds  and  bank 
shares.  The  most  important  kind  of  property  is  land. 
The  land  and  the  buildings  upon  it  constitute  "  real 
estate."  What  gives  anyone  a  private  right  to  own  the 
land?  It  is  not  property  that  is,  a  man's  own,  in  the 
same  sense  that  the  things  which  he  has  created  are 
his. 

When  Robinson  Crusoe  came  to  his  lonely  island,  al- 
though savages  sometimes  roamed  over  it,  they  were  not 
using  it,  and  did  not  rightly  own  it.  Crusoe  accord- 
ingly took  what  he  needed  for  pasture  or  for  tillage  and 
garden.  Suppose  that  another  ship  were  wrecked  on 
the  island,  and  its  crew  came  ashore.  It  would  not 
be  fair  for  him  to  claim  the  whole  island,  and  to  make 
them  pay  him  for  the  wild  land;  nor,  on  the  other  hand, 
would  it  be  fair  for  them  to  take  from  him  the  land 
that  he  was  using.  The  land  was  his  to  hold  and  use, 
but  not  to  own  against  the  welfare  of  others. 

Suppose,  after  the  best  land  had  been  taken  up, 
another  company  of  men  came  ashore.  It  seems  hard 
that  they  should  not  have  as  good  land  as  the  earlier 
comers;  but  it  would  not  be  right  to  demand  the 
fields  already  occupied,  cleared,  and  improved.  When 
strangers  come  late  to  the  table  at  the  hotel,  it  will  be 


30        RIGHTS   AND   DUTIES   OF   BUSINESS  AND   LABOR 

friendly  in  those  who  are  seated  to  move  closer  and 
accommodate  the  later  ones,  but  otherwise  must  they 
not  wait  for  the  second  and  possibly  poorer  table  ? 

As  long  as  there  is  plenty  of  wild  land,  as  there  once 
was  in  the  United  States,  there  is  little  difficulty  about 
the  ownership  of  it.  So,  if  every  one  used  his  land, 
having  got  it  fairly  in  the  first  place,  there  might  not  be 
any  question  about  its  rightful  ownership.  But  suppose 
the  land  was  acquired  in  war  or  by  violence;  or  by 
injustice,  as  when  the  Highland  lords  in  Scotland  dispos- 
sessed the  clansmen  of  land  which  rightfully  belonged  to 
all  the  tribe ;  or  b}'  a  fiction,  as  when  the  king  of  England 
granted  or  sold  vast  lands  in  America  which  did  not 
belong  to  him. 

The  laws  and  custom  have  allowed  men  to  take  up  and 
hold  more  land  than  they  can  use,  and  to  keep  it  unem- 
ployed when  others  need  it.     This  cannot  be  right. 

When  wrongs  have  been  done,  it  is  hard  to  right  them 
at  once  without  doing  more  wrong.  For  the  present  own- 
ers of  the  lands  that  were  once  wrongly  acquired  may 
have  honestly  paid  for  them,  and  may  really  use  them. 
We  do  not  wish  to  take  anything  which  our  fellows  have 
paid  for  without  making  compensation,  or  to  change  the 
laws  about  holding  and  taxing  the  land,  except  with 
regard  to  the  welfare  of  the  whole  people.  Here  is  a 
great  question  to  think  about.  Is  our  custom  of  per- 
mitting unlimited  property  in  land  a  public  advantage 
or  not?  Suppose  there  is  more  enterprise  and  better 
care  of  the  land  when  men  are  free  to  acquire  and  use  it 
as  they  please;  even  so,  it  can  never  be  right  that  in- 
dividuals shall  hold  great  tracts  of  land  as  their  exclusive 
domain,  while  millions  of  others  have  no  land. 


THE   INSTITUTION  OF   PROPERTY 


31 


The  right  of  eminent  domain.  —  Property  in  land  is 
in  fact  always  held  subject  to  the  needs  of  the  State. 
Thus,  if  the  government  requires  a  piece  of  land  for 
public  buildings,  if  a  new  street  or  a  railroad  needs  to 
be  laid  out  through  a  man's  farm,  the  individual  cannot 
keep  his  land  in  the  face  of  a  public  necessity.  He  is 
simply  entitled  to  fair  compensation  so  as  to  save  him 
from  actual  loss. 

Corporate  and  common  property.  —  There  is  much 
wealth  owned  by  persons  in  common.  Thus,  several 
farmers  may  own  a  threshing-macliine  or  a  creamery. 
A  nmnber  of  persons  may  unite  in  establishmg  a  savings 
bank  or  a  factory;  they  constitute  a  corporation.  All 
the  people  of  a  town  or  city  own  the  public  buildings 
and  schools,  the  parks  and  the  streets.  Every  new- 
comer who  is  enrolled  as  a  citizen,  and  every  child  born 
in  the  city,  becomes  a  sharer  in  this  property  on  equal 
terms  with  the  rest.  So  wath  the  property  of  the  State, 
in  which  every  citizen  is  a  sharer.  So  with  the  property 
of  the  Nation,  including  great  tracts  of  lands  and  forests 
and  water  power  in  the  Territories.  Our  Government 
claims  such  lands  as  belonging  to  the  American  people, 
and  not  to  people  in  Asia  or  Africa,  because  the  land 
is  within  our  boundaries;  as  a  farmer  claims  land  for 
which  he  holds  a  title.  The  Nation  thus  becomes  re- 
sponsible for  the  care  and  proper  use  of  this  public 
domain,  polices  it,  and  provides  against  fire  and  other 
kinds  of  waste. 

All  may  too  become  sharers  in  the  knowledge,  the 
inventions,  the  discoveries,  by  which  each  generation 
inherits  the  labor  and  thought  of  all  pre\dous  time.  The 
value  of  this  common  knowledge  is  immeasurable. 


32         RIGHTS  AND   DUTIES   OF   BUSINESS   AND   LABOR 

Property  and  the  public  interest.  —  We  respect  private 
property  for  two  reasons.  One  reason  is  our  regard  for 
the  individual.  We  respect  his  claims  to  his  various  be- 
longings and  earnings  as  we  wish  our  own  claims  to  be 
considered  by  him.  A  second  reason  is  the  public  good. 
There  will  be  more  work,  industry,  energy,  and  thrift,  if 
individuals  have  freedom  to  own  and  use  and  give  away 
their  property,  than  if  we  forbid  them  to  have  anything 
of  their  own.  This  is  the  experience  of  mankind.  It  is 
the  same  in  a  nation  as  in  a  family.  The  whole  family 
will  have  more  if  each  member  can  make  and  hold  his 
own  things,  than  if  no  one  can  call  anything  his  own. 
So  the  community  will  create  and  possess  more  wealth, 
and  all  will  therefore  be  likely  to  be  better  off,  if  each  is 
reasonably  free  to  acquire  and  hold  property,  than  if  all 
the  property  were  held  in  common.  We  presume,  how- 
ever, that  the  individual  gets  his  property  honestly  and 
not  at  the  loss  of  others.  To  get  property  honestly 
means  usually  to  get  it  by  some  kind  of  useful  service. 

If  we  discover  any  kind  of  property  —  turnpikes, 
bridges,  waterworks,  or  railways  —  which,  in  view  of  the 
common  welfare,  individuals  or  companies  had  better 
not  continue  to  hold  privately,  the  individuals,  in  such 
case,  ought  to  consent  to  let  the  public  acquire  it,  in  such 
a  way  as  to  do  no  injustice  to  the  present  owners. 

Responsibility  for  property.  —  We  have  seen  in  gov- 
ernment that  an  official  does  his  work  best  when  he  is 
directly  responsible  for  his  conduct.  So,  a  reasonable 
regard  for  private  property  works  to  make  each  person 
responsible  for  what  he  has.  He  learns  about  values, 
and  what  wealth  is  for,  and  how  much  effort  it  costs  to 
earn  a  dollar.     If  the  boy  has  his  own  clothes  and  hat, 


I 


THE   INSTITUTION  OF  PROPERTY  33 

he  and  no  one  else  will  be  bound  to  take  care  of  them. 
If  he  has  his  allowance,  he  will  be  bound  to  keep  account 
of  it,  and  not  to  waste  or  lose  it.  So  if  a  man  has  his 
own  property,  he  learns  to  use  and  save  it.  If  he  has  his 
own  land,  he  is  responsible  for  the  care  he  takes  of  it;  he 
will  take  pleasure  in  tending  and  beautifying  it;  he  will 
be  likely  to  put  permanent  improvement  upon  it,  in 
clearing  and  draining  it;  he  can  afford  to  build  a  sub- 
stantial house,  where  an  Arab  would  only  set  up  a  tent. 
To  respect  a  man's  property  is  thus  to  make  him  respon- 
sible for  it;  and  responsibility  develops  his  character 
and  makes  him  more  of  a  man.  If  he  is  a  good  steward 
for  his  own  property,  he  learns  to  be  a  good  steward  for 
the  public  property.  Whereas  if  he  is  too  slovenly  to 
take  care  of  his  own,  he  would  be  unlikely  to  take  good 
care  of  the  common  property. 


CHAPTER  V 
HONEST   MONEY 

Men  do  not  trade  together  long  before  they  invent 
something  to  measure  the  value  of  wealth.  Money  is 
that  by  which  they  make  such  measurement,  as  they 
measure  distance  by  the  length  of  a  pole,  or  by  a  yard- 
stick. They  begin  with  rude  kinds  of  money,  such  as 
wampum  or  beads  or  cattle.  Thus  an  American  Indian 
would  sell  a  valuable  package  of  furs  for  strings  of  wam- 
pum. The  precious  metals,  and  especially  silver  and 
gold,  have  been  the  chosen  forms  of  money  among 
civilized  nations  for  thousands  of  years.  In  early  times 
the  money  was  weighed.  Afterwards  it  was  coined;  that 
is,  a  bit  or  piece  of  a  certain  weight  was  stamped  by  the 
sovereign  or  the  government. 

Changes  in  the  value  of  money.  —  It  would  be  con- 
venient if  one  kind  of  metal  had  always  had  uniform 
value.  But  there  is  no  such  metal.  The  supply  of  gold 
or  silver,  Hke  the  supply  of  other  things,  varies  from  one 
time  to  another.  The  opening  of  new  mines  and  fresh 
discoveries  of  precious  metals  tend  to  lower  their  value, 
as  a  large  harvest  lowers  the  price  of  wheat.  On  the 
other  hand,  increasing  trade  causes  a  demand  for  more 
money,  and  tends  to  absorb  the  supply.  Ignorant 
people,  as  in  the  Orient,  often  hoard  or  hide  their 
money;  this  money  "  goes  out  of  circulation."  There  is 
a  changing  demand  also  for  gold  and  silver  for  other 

34 


HONEST  MONEY  35 

purposes  besides  money,  as  for  articles  of  ornament  or 
luxury;  thus  much  coin  is  melted  down  every  year  and 
ceases  to  be  money.  For  various  reasons  the  same 
amount  or  weight  of  gold  or  silver  will  not,  therefore,  buy 
as  much  at  one  period  as  at  another.  Probably  a  dollar 
in  gold  never  bought  so  little  food  or  paid  for  so  little 
work  as  now. 

The  double  or  single  standard  of  value.  —  It  has  been 
common  to  use  both  gold  and  silver  money,  though  un- 
fortunately the  two  metals  vary  with  respect  to  each 
other,  like  all  other  values.  Thus,  gold  is  estimated  to 
have  been  worth  eleven  times  as  much  as  silver  in  the 
fifteenth  century,  fifteen  times  as  much  at  the  close  of 
the  eighteenth  century,  and  more  than  eighteen  times 
as  much  in  1879.  There  have  been  further  changes  since. 
Thus,  the  silver  in  a  dollar  may  not  now  buy  one  hundred 
cents'  worth  of  labor  or  produce. 

A  moral  question.  —  When  the  Government  stamps  a 
coin  and  makes  it  "  legal  tender,"  that  is,  good  money 
to  pay  debts,  the  stamp  is  a  guarantee  or  pledge  that 
the  coin  has  as  much  value  as  it  says  on  its  fate.  Thus, 
the  gold  eagle  says, ''  I  carry  two  hundred  and  fifty  eight 
grains  of  gold."  But  if  the  Government  should  make 
eagles  with  one-fifth  less  gold  than  before,  and  still  mark 
''  ten  dollars  "  on  them,  they  would  not  tell  the  truth. 
Every  one  who  had  promised  to  pay  a  thousand  dollars 
could  use  the  cheaper  coin  to  pay  his  creditor.  But  sup- 
pose, when  the  debt  is  due,  the  gold  coin  is  a  fifth  harder 
to  procure  than  when  the  promise  was  given;  ought  the 
creditor  to  be  willing  to  accept  fewer  dollars  ?  This  may 
happen,  without  the  interference  of  a  government,  but 
by  a  slow  change  in  conditions  of  business. 


36        RIGHTS   AND   DUTIES   OF   BUSINESS   AND  LABOR 

The  money  of  commerce.  —  Govermnents  coin  money, 
but  the  commerce  of  the  world  fixes  its  value.  For 
commerce,  in  her  great  markets,  Like  London  and  New 
York,  where  the  business  of  the  world  meets  and  is 
settled,  asks  of  all  commodities,  and  the  coins  of  every 
nation,  What  is  their  worth  ?  A  government  may  put  a 
false  mark  on  a  coin  or  mix  alloy  with  the  metal,  but 
commerce  weighs  and  tests  the  coin,  and  will  not  give 
more  than  it  is  worth. 

For  the  present,  the  standard  of  commerce  seems  to  be 
gold.  This  is  because  the  great  commercial  nations  use 
this  metal  in  settling  their  accounts.  Even  when  they 
use  silver  coinage  along  with  the  gold,  as  a  matter  of  fact, 
they  refer  their  values  to  the  gold  basis.  Thus  the 
United  States  counts  values,  not  in  silver  dollars,  worth 
in  weight  of  silver  less  than  a  dollar,  but  in  gold  dollars 
corresponding  to  the  pound  sterling  of  London.  When 
money  has  to  be  sent  back  and  forth  between  nations, 
the  gold  is  more  convenient,  being  less  bulky. 

Paper  money.  —  Although  a  dollar  means  a  certain 
weight  of  precious  metal,  most  of  the  money  in  use  con- 
sists of  paper  bills.  There  is,  in  fact,  risk  and  inconven- 
ience in  carrying  coin,  and  especially  in  doing  a  large 
business  with  it.  If  all  the  wheat  and  cotton  of  the  West 
and  South  had  to  be  paid  for  in  metallic  money,  there 
would  be  great  cost  and  loss,  merely  in  sending  the  vast 
weight  of  coin  thousands  of  miles.  Civilized  men  have 
therefore  invented  paper  money  of  various  kinds  as  a 
substitute  for  coin.  A  large  part  of  the  paper  money  in 
use  is  issued  by  the  National  Government. 

Bank  bills.  —  A  bank  bill  is  really  a  printed  promise 
or  order  for  coin.    The  bank  will  pay  you  the  coin  if 


HONEST  MONEY 


37 


you  prefer  it  to  the  paper.  As  long  as  men  believe  that 
the  bankers  will  keep  their  promises,  and  pay  the  coin 
when  requested,  they  do  not  care  for  the  coin,  but  find 
bills  more  convenient.  In  order  that  the  people  may  be 
protected  from  loss,  it  is  the  custom  for  the  Govern- 
ment to  superintend  the  banks  which  issue  bills.  They 
are  not  allowed  to  issue  too  many  bills;  that  is,  to  make 
more  promises  than  they  are  able  to  keep.  A  great 
system  of  Reserve  Banks  established  by  act  of  Congress 
holds  the  banks  together  and  helps  to  keep  the  credit  of 
each  bank  sound. 

Checks  and  drafts.  —  Besides  bank  bills  there  are  mil- 
lions of  money  in  private  paper  orders  which  are  sent  by 
mail,  or  pass  from  hand  to  hand.  Thus,  a  merchant  in 
New  York,  instead  of  sending  a  great  roll  of  bills  to  pay 
for  lumber  or  iron,  deposits  the  money  in  a  bank,  and 
writes  a  check  or  order  upon  the  bank  for  the  amount  of 
his  debt.  If  the  merchant  is  honest,  the  check  is  the 
same  as  money,  and  another  bank  in  Michigan  or  Ten- 
nessee will  accept  it  from  the  lumber  or  iron  dealer.  Or, 
a  merchant  in  New  York,  wishing  to  pay  for  his  goods  in 
Bordeaux,  will  get  a  draft  or  order  for  so  much  money 
from  a  banker  in  his  own  city  upon  a  banker  in  Paris  or 
London.  This  draft  upon  a  well-known  and  honorable 
bank  will  be  as  good  as  money  anywhere  in  the  world 
where  ships  go.  Thus  orders  for  money  become  them- 
selves a  kind  of  money.  The  orders  may  even  be  sent 
by  telegraph  over  the  continent  or  under  the  ocean. 
Thus  a  bank  in  Chicago,  which  is  known  in  Rome  or 
Petrograd,  may  telegraph  an  order  to  pay  some  American 
student  money  which  the  boy's  father  had  deposited  in 
his  bank  at  home. 

537^54 


38        RIGHTS  AND   DUTIES   OF   BUSINESS  AND   LABOR 

Government  and  paper  money.  —  The  Government  of 
the  United  States  borrowed  on  an  enormous  scale  to  pay 
the  expenses  of  the  Civil  War.  Besides  other  methods 
of  borrowing,  hundreds  of  milHons  of  dollars  in  bills  were 
issued.  These  bills  were  the  promises  or  pledges  of  the 
Government  to  pay  as  many  dollars  in  coin  as  was  printed 
on  the  face  of  the  bill.  The  bills  were  used  to  pay  for 
supplies  and  the  wages  of  soldiers.  The  Government, 
however,  was  not  able  for  a  time  to  keep  its  promises  and 
to  pay  specie,  that  is,  the  coined  money  of  commerce,  to 
merchants  and  others  who  wanted  it.  On  the  contrary, 
the  quantity  of  paper  notes  was  so  great  that  some  feared 
lest,  as  in  the  case  of  the  continental  currency  of  the 
Revolutionary  War,  the  bills  would  never  be  paid.  It 
happened  finally  that  almost  three  paper  dollars  were 
required  to  get  the  value  of  one  gold  dollar.  The  value 
of  the  paper  dollar  varied  with  every  victory  or  defeat  of 
the  national  arms.  The  gold  and  silver  were  hoarded 
away  or  sent  abroad  to  pay  the  merchant's  debts. 
This  was  because  the  paper  dollar  no  longer  told  the 
truth. 

Specie  payments.  —  After  the  Civil  War,  as  soon  as 
confidence  was  restored  that  the  Government  could  keep 
its  promises,  the  paper  money  rose  in  value.  The  yard 
of  cloth  that  had  sold  for  nearly  three  dollars  could  now 
be  had  for,  perhaps,  a  dollar  and  a  quarter.  At  last  the 
Government  resolved  to  make  the  paper  dollar  tell  the 
truth  again.  It  was  announced  that  anyone  who  wished 
might  have  gold  coin  at  the  Treasury  in  exchange  for  the 
paper  bills.  But  very  few  persons  now  desired  to  draw 
the  bulky  gold,  since  the  paper  dollar  at  once  became  as 
good  as  the  gold  to  buy  the  yard  of  cloth. 


HONEST  MONEY  39 

Gold  and  silver  certificates.  —  Besides  the  notes  of  the 
Government,  or  its  promises  to  pay,  other  bills  or  certifi- 
cates have  been  issued  which  entitle  the  holder  to  so  many 
gold  dollars,  and  again  another  class  which  entitle  the 
holder  to  so  many  silver  dollars,  deposited  in  the  Treasury 
vaults.  These  certificates  are  also  as  good  as  money,  and 
much  more  convenient. 

A  national  danger.  —  Our  Government  has,  first,  gold 
dollars  which  correspond  to   the  money  of  commerce, 
containing  the  precise  value  marked  on  the  face  of  them ; 
second,  silver  dollars,  stamped  by  the  Government,  but 
containing  less  than  their  value;  third,  silver  and  nickel 
currency,  used  merely  for  convenience,  but  not  contain- 
ing nearly  the  worth  stamped  upon  it;  and,  fourth,  paper 
notes  and  certificates,  worth  nothing  in  themselves,  but 
guaranteed  by  the  wealth  and  honor   of   the  Nation. 
These  different  kinds  of  money  circulate  together  as  long 
as  the  Government  honestly  keeps  in  its  vaults  sufficient 
gold  coin  —  the  money  of  commerce  —  to  enable  every 
one  who  has  silver  or  paper  dollars  to  come  and  get  an 
equal  number  of  gold  dollars,  if  he  needs  them,  to  pay  for 
goods  abroad.     If,  however,  at  any  time,  the  Govern- 
ment should  refuse  to  give  the  merchant  the  real  value  in 
gold  in  exchange  for  the  silver  or  the  paper,  the  same 
thing  would  happen  as  in  the  Civil  War :  the  silver  dollar 
and  the  paper  would  cease  to  tell  the  truth ;  the  yard  of 
cloth  would  rise  in  price;  all  values  would  change. 

It  would  be  precisely  as  if  the  Government,  like  the 
despots  of  old  times,  cHpped  the  coin  or  mixed  alloy  with 
it,  so  as  to  make  a  new  dollar  of  less  worth.  The  true 
dollars,  such  as  the  commerce  of  the  world  buys  and  sells 
with,  part  company  with  the  false  or  debased  dollars,  and 


40        RIGHTS  AND   DUTIES   OF   BUSINESS   AND   LABOR 

disappear  from  the  hands  of  the  people  whose  govern- 
ment does  not  keep  its  faith  or  make  its  money  tell  the 
truth. 

We  see  here  how  war  tends  to  unsettle  values.  While 
multitudes  of  men  are  drafted  away  from  the  usual  in- 
dustries, the  labor  of  others  becomes  scarce  and  prices 
rise.  While  immense  sums  of  money  are  borrowed  and 
spent,  the  dollar  cannot  buy  as  much  as  before. 


1 


CHAPTER   VI 
CAPITAL,    CREDIT,   AND    INTEREST 

Suppose  a  number  of  men  go  on  a  fishing  voyage. 
It  is  not  enough  to  possess  skill  and  strength;  they  need 
boats,  fishing  tackle,  and  a  stock  of  provisions  to  Hve 
on  while  they  are  gone.  The  wealth  required  to  begin 
an  enterprise,  or  to  carry  work  through,  is  called  capital. 
Thus  a  farmer,  if  his  land  were  given  him,  would  still  need 
farming  tools,  cattle,  and  provisions  enough  to  support 
him  till  he  got  his  first  harvest.  He  would  presently 
need  capital  to  build  a  new  barn.  In  the  case  of  a  great 
enterprise,  a  factory  or  a  railroad,  an  enormous  capital 
must  often  be  laid  out  to  purchase  materials  and  hire  the 
labor  of  a  large  body  of  men  before  any  return  is  made  to 
those  who  expend  their  capital. 

A  poor  or  barbarous  people  make  little  progress,  be- 
cause they  have  no  wealth  or  capital  with  wliich  to  buy 
material  and  tools  or  to  feed  and  clothe  workmen. 
Where  every  one  is  poor,  men  have  to  supply  their  own 
daily  necessities.  There  must  at  least  be  an  accumula- 
tion of  food  before  great  works  can  be  undertaken. 

The  accumulation  of  capital.  —  Whoever  produces  or 
saves  more  than  he  consumes  accumulates  capital;  for 
example,  a  farmer  may  produce  food  enough  for  a  dozen 
families,  or  a  shoemaker  can  make  shoes  enough  for 
a  neighborhood.  Wherever  men  labor,  their  industry 
accumulates  capital,  or  produces  and  lays  up  a  supply  of 
produce  or  material  to  be  drawn  upon  for  further  work. 

41 


42        RIGHTS  AND   DUTIES  OF  BUSINESS   AND  LABOR 

In  the  most  simple  society,  the  harvest  of  each  year  is 
the  capital  to  provide  against  the  needs  of  another  year. 

The  use  of  machinery,  and  especially  of  steam,  water, 
and  electric  power,  enables  a  few  workmen  to  do  the 
work  of  armies  of  men,  and  so  to  accumulate  capital  on 
a  grand  scale. 

Credit.  —  A  man  does  not  always  need  to  have  accu- 
mulated capital  himself.  If  he  can  work  and  is  honest, 
he  may  find  some  one  willing  to  make  him  a  certain 
advance  of  money  or  provisions  on  the  expectation  that 
he  will  do  work  or  business  enough  to  repay.  The 
amount  of  this  advance  is  called  his  credit,  and  depends 
upon  his  ability  and  character.  If  he  is  a  skillful  fisher- 
man, he  may  find  some  one  who  will  lend  him  a  boat.  If 
he  has  at  the  same  time  a  piece  of  property,  a  house,  or  a 
lot  of  land,  his  credit  will  be  greater ;  some  one  may  trust 
him  with  money  to  build  a  larger  boat.  Perhaps  an  in- 
dustrious shoemaker,  who  has  saved  a  thousand  dollars, 
thus  becomes  a  silent  partner  with  the  fisherman,  and 
both  get  on  better  by  this  cooperation. 

So,  a  farmer  owning  his  land  and  buildings  may  not 
only  work  his  farm,  but  through  his  credit  obtain  addi- 
tional capital  to  make  improvements  and  increase  his 
products.  Or  the  o\vner  of  a  mill  may  go  to  the  bank 
and  get  money  to  buy  raw  material  or  to  expend  in  wages 
to  his  men  till  his  returns  come  back  from  the  sale  of  his 
goods.  All  this  is  made  possible  by  credit,  or  the  trust 
which  men  repose  in  one  another's  good  faith  in  keeping 
their  promises.  The  more  honest  men  are,  the  more 
credit  there  is  and  the  more  work  can  be  done. 

Corporations.  —  Many  individuals,  each  with  small 
earnings  or  savings,  often  combine  together,  and  trust 


b 


CAPITAL,   CREDIT,   AND    INTEREST  43 

their  capital  to  directors  or  trustees  who  manage  for  all  as 
they  would  for  themselves.  Thus  masses  of  capital  may 
be  employed  to  better  advantage  than  a  small  capital, 
in  using  machinery  and  paying  many  workmen,  so  as  to 
produce  more  and  to  effect  greater  economy.  Railroads, 
gas  companies,  cotton  mills,  savings  banks,  and  many 
other  corporations  are  formed  by  this  kind  of  union 
among  many  individuals.  These  corporations  for  mass- 
ing and  using  capital  are  only  made  possible  where  there 
is  a  considerable  number  of  able  and  honorable  men,  who 
can  be  trusted  to  hold  and  manage  the  money  of  others. 

Profits.  —  In  most  kinds  of  industry  —  in  farming,  for 
example  —  our  labor  produces  more  than  its  bare  equiv- 
alent. There  is  a  natural  increase  besides  the  cost  of 
production.  We  call  this  surplus  the  profit.  It  arises 
from  our  putting  into  the  enterprise  something  more  than 
the  mediocre  average  of  our  energy,  brains,  and  skill.  It 
is  the  encouragement  which  nature  gives  when  man  be- 
gins to  work.  Thus  a  farmer  ought  to  be  better  off  at 
the  end  of  the  year  than  he  was  at  the  beginning.  There 
will  be  an  increase  of  cattle  and  sheep  and  fowls.  The 
amount  of  this  increase  will  depend,  not  only  upon  his 
skill  and  intelhgence,  but  also  upon  the  capital  which  he 
has  at  his  disposal.  If  he  has  money  enough,  he  can 
employ  extra  labor  to  drain  his  boggy  land;  he  can  fer- 
tilize his  fields;  he  can  buy  machinery,  and  harvest  larger 
crops.  Nature,  by  showers  and  sunshine  and  the  fertile 
soil,  will  always  add  something  to  encourage  his  enter- 
prise; on  the  other  hand,  if  he  is  lazy  and  dull,  nature  will 
prod  him  with  various  discomforts  to  urge  him  to  labor 
and  to  learn. 

So  in  other  kinds  of  industry.     Besides  barely  enough 


44         RIGHTS   AND   DUTIES  OF   BUSINESS  AND   LABOR 

to  support  life,  the  patient  and  skillful  fisherman  will 
bear  home  a  profit  which  he  can  dispose  of  to  enable  him 
to  add  to  his  capital.  If  he  already  has  capital  enough  to 
buy  the  best  sails  and  fishing  tackle,  and  intelligence  to 
direct  a  number  of  men,  he  can  increase  the  profits  of 
his  whole  crew. 

The  merchant,  likewise,  who  contrives  to  bring  sup- 
plies of  goods  to  the  points  where  men  need  them  most  — 
from  the  farms  where  the  owners  have  been  known  to 
burn  the  corn  for  fuel  to  the  towns  where,  without  the 
corn,  people  would  starve  —  will  get  more  than  the  bare 
cost  of  his  business  and  his  living.  He  will  "  make 
money  "  in  helping  others  to  make  money. 

In  short,  the  whole  community,  if  intelligent  and  in- 
dustrious, will  do  better  than  merely  to  live;  it  will  be 
enriched  by  the  increase  or  profit  which  nature,  cooper- 
ating with  man,  gives  for  labor  wisely  expended.  This 
profit  will  be  larger  in  proportion  to  the  skill,  education, 
patience,  industry,  and  integrity  of  the  people.  It  will 
tend  to  come  to  those  who  show  these  qualities,  but  will 
be  reduced  wherever  the  people  are  dull,  dishonest,  shift- 
less, or  lazy. 

Rent  and  interest.  —  Suppose  that  a  skillful  young 
fisherman  borrows  a  boat  and  tackle  of  a  widow  whose 
husband  has  been  drowned,  and  goes  fishing.  When  he 
returns,  he  shares  his  catch  of  fish  with  the  men  who  went 
with  him,  and  with  the  woman  who  owns  the  boat.  This 
is  her  interest  in  the  fishing,  on  account  of  her  boat.  This 
would  be  the  simplest  form  of  interest.  It  would  be  the 
same,  in  fact,  if  the  fisherman,  instead  of  paying  a  share 
of  his  catch  in  fish,  engaged  to  pay  her  a  fixed  sum  for  the 
use  of  the  boat. 


CAPITAL,   CREDIT,   AND   INTEREST  45 

It  would  still  be  the  same  in  case  the  fisherman,  in- 
stead of  hiring  the  boat,  borrowed  from  the  widow  the 
value  of  the  boat  in  money.  The  young  fisherman  could 
then  buy  a  boat  for  himself,  and  pay  her  for  the  use  of  her 
money  the  same  sum  which  he  might  have  paid  for  the 
boat. 

Likewise,  if  the  widow  has  a  farm  which  her  husband 
has  cleared  and  drained,  or  which  he  has  paid  for  out  of 
his  earnings,  some  one  might  like  to  borrow  the  farm,  and 
pay  her  a  share  of  his  harvest.  He  might  thus  do  better 
for  himself  than  if  he  took  up  wild  land.  Or  he  might 
borrow  in  another  way.  The  woman  might  have  sold 
the  farm  outright  for  money;  he  could  then  borrow  the 
money,  and  buy  a  farm,  and  pay  her  so  much  every  year 
for  the  use  of  the  money,  instead  of  paying  for  the  use 
of  the  land. 

By  the  use  of  the  woman's  capital,  the  fisherman  or 
the  farmer  increases  his  product;  without  it  he  could 
not  have  made  so  much.  He,  therefore,  in  fairness, 
shares  with  the  owner  of  the  capital.  This  bargain 
is  good  for  both  parties  in  it.  If  one  borrows  a  thing, 
a  piece  of  property,  or  land,  the  share  that  he  gives 
for  its  use  is  called  the  rent.  But  if  he  borrows  money, 
the  return  upon  it  is  called  interest.  We  have  seen  that 
money  is  practically  an  order  to  pay  for  things  or  prop- 
erty. The  borrower  of  money  really  borrows  the  things, 
whether  boats,  supplies,  provisions,  or  materials,  that  he 
purchases  with  the  money.  The  farmer  who  borrows 
money  to  improve  his  barn  or  buy  stock  really  borrows  to 
buy  fertilizers  or  cattle.  The  money  is  merely  a  conven- 
ience in  making  the  exchanges.  When  at  the  end  of  the 
year  he  realizes  larger  harvests  on  account  of  these  im- 


46        RIGHTS  AND   DUTIES   OF   BUSINESS  AND   LABOR 

provements,  he  owes  a  share  as  interest  to  the  person 
whose  labor  or  whose  saving  has  enabled  hini  to  have  the 
use  of  the  money. 

So  with  the  mill  that  has  borrowed  money  to  buy  cot- 
ton to  make  into  cloth.  Part  of  the  returns  must  go  to 
the  bank,  that  is,  to  the  persons  who,  instead  of  spending 
their  money,  saved  it  and  put  it  into  a  bank  to  be  used  as 
capital  for  new  enterprises.  Do  not  these  bank  deposi- 
tors deserve  their  share  of  the  products  of  the  mills,  as  well 
as  the  workmen  who  furnished  the  labor,  or  the  superin- 
tendent who  managed  with  the  use  of  his  brains  to  make 
the  mill  a  success? 

The  rate  of  interest.  —  It  might  be  agreed  that  the  in- 
terest or  rent  should  depend  upon  the  amount  of  the 
product,  whether  more  or  less,  of  the  fishing-boat  or  the 
farm.  The  lender  should  have  a  certain  share,  large  or 
small,  and  the  workman  another  share,  and  the  manager 
who  borrowed  the  capital  still  another.  This  is  done  in 
some  cases.  All  then  share  in  the  risks  and  in  the  profits. 
Some  years  they  would  make  good  profits;  again  they 
might  lose. 

But  suppose  the  man  who  lends  the  boat  or  the  money 
prefers  to  take  a  small  fixed  rent  or  interest  rather  than 
to  share  in  the  risks  of  the  business,  and  sometimes  fail 
to  get  anything.  This  is  usually  the  case.  A  savings 
bank  lends  its  money  at,  for  instance,  six  dollars  a  year 
for  every  hundred.  The  borrower  gives  security,  per- 
haps a  mortgage  upon  his  house,  and  takes  all  the  risks. 
The  bank  then  gets  a  regular  return  for  its  money  to 
divide  among  the  persons  who  have  trusted  their  savings 
to  its  care.  The  borrower  has  all  the  profits,  after  paying 
his  interest  and  other  costs. 


CAPIT.\L,    CREDIT,   AND   INTEREST  47 

How  interest  is  fixed.  —  The  amount  of  interest  upon 
money,  or  the  rent  of  capital,  varies  like  all  other  prices. 
It  depends  upon  the  amount  of  money  to  be  lent,  whether 
it  is  plenty  or  scarce;  upon  the  times,  whether  they  are 
peaceful  or  stormy;  upon  the  demand  for  money,  whether 
few  or  many  want  to  borrow;  upon  the  security  that  can 
be  given,  whether  there  is  much  or  little  risk  of  repay- 
ment; upon  the  prosperity  of  the  community  where  the 
money  is  used,  whether  the  profits  of  business  there  are 
large  or  small.  Thus  the  same  money  which  will  only 
bring  three  to  five  per  cent  when  loaned  to  the  Govern- 
ment might  bring  six  per  cent  or  more  if  loaned  to  a 
private  person;  or,  sent  to  a  new  growing  country  like 
the  State  of  Washington,  it  might  get  ten  per  cent  or 
more.  If  the  lender  shares  in  the  risk,  he  also  shares 
justly  in  the  larger  profits.  If  he  wishes  perfect  security, 
and  the  borrower  takes  all  the  chances,  he  must  be  con- 
tent with  a  small  regular  share.  In  the  long  run  the 
people  who  take  risks,  expecting  to  "  make  money " 
without  labor  or  trouble,  make  less  than  their  neighbors 
who  put  their  money  into  the  savings  banks. 

In  general,  and  except  in  war,  the  rate  of  interest  upon 
good  security  tends  to  diminish.  This  is  because  civili- 
zation produces  such  large  capital  and  vast  credit  that 
reasonable  enterprises  can  get  what  they  need. 

If  interest  is  low,  other  things  are  likely  to  be  low;  and 
no  one  has  to  pay  so  much  for  hiring  his  house  or  for  the 
cost  of  living.  But  if  the  interest  is  high,  every  one  who 
has  a  dollar  in  the  savings  bank  or  a  single  share  in  a 
corporation  shares  in  the  increase.  This  is  because  the 
community  is  linked  together,  so  that  whatever  affects 
the  whole  affects  each  one. 


48         RIGHTS  AND   DUTIES   OF   BUSINESS  AND   LABOR 

Usury.  —  Interest  means  the  price  paid  for  the  use  of 
capital ;  but  it  once  had  a  bad  name  —  usury.  For  in  old 
times,  before  the  science  of  money  was  understood,  many 
thought  it  wrong  to  exact  interest  upon  money,  though 
no  one  saw  any  harm  in  taking  interest  as  rent  for  property 
or  land  or  boats.  Money  was  scarce,  and  many  lenders 
were  extortionate,  and  took  cruel  advantage  of  their 
debtors.  Laws  were  therefore  often  passed,  forbidding 
more  than  a  certain  rate  of  interest.  To  take  higher 
interest  than  the  law  allowed  was  called  usury.  But 
these  laws,  Uke  the  laws  which  governments  have  passed 
to  fix  the  prices  of  other  things,  did  little  good.  In  some 
States  such  laws  may  still  remain,  though  they  are  con- 
stantly disregarded. 

The  fact  is,  that  all  prices  of  money,  land,  labor,  or 
products  depend  upon  "the  law  of  supply  and  demand." 
Ten  per  cent  may  be  as  fair  interest  on  the  Pacific  coast, 
where  the  demand  is  great,  as  five  per  cent  is  in  New 
York.  In  New  York,  too,  money  may  be  better  worth 
six  or  seven  per  cent  in  a  good  year  of  business  than  five 
per  cent  in  a  very  dull  year.  Neither  can  any  legislature 
compel  a  man  to  lend  his  money  or  his  land  unless  a  fair 
return  is  offered  him. 

Foolish  borrowing.  — -  Wise  borrowing  proposes  some 
increase  of  useful  effort.  Like  honest  labor,  it  produces 
for  the  community  more  than  would  otherwise  be  gained. 
But  what  if  the  man  borrows  for  things  that  he  cannot 
afford  —  an  automobile  for  pleasure,  or  diamonds  for  his 
wife,  or  to  speculate  with  ?  What  if  a  man  borrows,  not 
to  increase  the  efficiency  of  his  work,  but  to  spend  for 
his  H\dng  expenses?  What  if  he  borrows  to  relieve 
sickness  or  poverty?     The  truth  is  that  most  of  us  had 


CAPITAL,    CREDIT,  AND   INTEREST  49 

better  pay  as  we  go,  and  lay  by  a  little  if  possible,  so  as 
not  to  need  to  borrow  and  to  be  able  on  occasion  to  help 
a  friend. 

Farmers'  banks.  —  An  interesting  plan  enables  farmers 
to  use  capital  upon  their  farms.  The  National  Govern- 
ment provides  for  the  establishment  of  banks  in  different 
sections  of  the  country  and  lends  its  credit  to  start  them. 
Investors  of  money  are  given  the  opportunity,  safely 
guarded,  to  put  their  savings  into  these  banks.  The 
farmers  give  security  for  the  amount  of  the  loans  and  the 
money  helps  them  to  raise  more  produce  than  they 
otherwise  could.  The  farmers  of  a  neighborhood  are 
associated  together  in  procuring  and  using  this  money. 
They  are  given  time  in  which  to  repay  their  loans  and 
they  pay  a  lower  interest  rate  than  if  each  farmer 
by  himself  had  to  find  a  money  lender.  This  is  what 
cooperation  does  to  help  people  to  help  themselves.  In 
many  countries,  for  instance,  in  Denmark,  there  are 
immense  systems  of  such  cooperation. 


I 


CHAPTER   VII 
LABOR  AND    COMPETITION 

The  law  of  life.  —  The  general  rule  is  that  men  must 
work  for  their  Uving.  The  amount  of  work  required  may- 
vary  with  men's  wants,  or  with  the  climate  in  which  they 
live.  A  native  of  Samoa  may  get  all  the  breadfruit  and 
cocoanuts  that  he  needs  with  Httle  effort.  But  the 
higher  the  standard  of  civilization,  the  more  things  men 
want;  and  the  more  labor  therefore  becomes  necessary. 

The  use  of  machinery,  with  the  forces  of  steam  and 
electricity,  does  not  serve  to  change  the  general  law. 
The  more  men  use  machines,  the  more  their  needs  in- 
crease, so  that  the  demand  for  labor  still  continues. 
Thus,  when  cloth  could  only  be  woven  slowly  by  hand, 
men  could  have  Uttle  cloth.  But  now  that  water  power 
or  steam  can  be  made  to  weave  cloth,  every  one  wants  so 
much  more,  that  men  and  women  still  have  to  work  for 
their  clothing. 

The  law  that  men  must  work  for  their  living  at  first 
seems  severe.  Is  it  not,  however,  a  kindly  law?  Thus 
on  the  playground,  those  who  join  in  the  play  not  only 
are  stronger,  but  surely  enjoy  more  than  those  who  only 
look  on  and  watch  the  others.  The  physicians  tell  us 
that  this  is  the  law  of  health. 

Labor  and  wages.  —  If  any  large  group  of  people,  the 
iron  founders,  for  instance,  stop  working,  the  supply  of 
iron  for  the  Nation  is  cut  down  at  once.  Every  one  pres- 
ently suffers.     On  the  contrary,  the  larger  the  number  of 

50 


LABOR  AND   COMPETITION  51 

the  workers  is,  the  more  regularly  they  work,  the  more 
they  accomplish,  and  the  fewer  the  drones  in  the 
hive,  the  greater  is  the  product,  and  the  more  on 
the  whole  every  one  has;  wages  therefore  tend  to  rise. 
It  is  the  same  with  a  nation  as  it  is  with  a  farmer's 
household.  If  all  his  children  work  they  have  produce 
to  sell  and  grow  prosperous.  Why  are  wages  higher  in 
the  United  States  than  in  Europe?  It  is  because  our 
product  is  greater. 

Labor  and  wealth.  —  Moreover,  besides  the  increase  of 
men's  needs  and  wants,  there  is  a  constant  increase  in 
the  number  of  the  population,  requiring  new  lands  to  be 
opened,  new  houses  to  be  built,  and  new  mills  to  saw 
lumber  or  weave  cloth.  If  all  the  wealth  of  the  richest 
nation  were  divided  equally,  it  would  last  but  a  short 
time  before  men  would  have  to  go  to  work  to  make  more 
wealth.  The  richest  nation  is  only  in  the  condition  of  a 
farmer  who  has  on  hand  a  rather  better  supply  of  tools, 
stock,  and  farm  buildings  than  his  neighbor.  But  be- 
cause he  has  this  better  supply,  more  care  is  required  to 
keep  it  in  order,  and  more  labor  is  needed  to  use  it. 
Thus,  though  the  richer  farmer  lives  better  than  his 
slovenly  neighbor,  he  must  still  work  equally  hard  or 
even  harder,  like  the  winning  crew  in  a  race. 

A  common  fallacy.  —  It  is  sometimes  imagined  that  it 
would  be  better  for  those  who  work  if  their  numbers  could 
be  restricted.  They  fancy  that  they  could  then  have 
better  pay.  Or  it  is  thought  that  the  workmen  would  be 
better  off  if  they  worked  fewer  hours  a  day.  There  are 
exceptional  cases  where  this  seems  true  for  a  while.  Our 
point  here  is  that  the  fewer  the  laborers  are  and  the  less 
they  work,  the  less  must  be  the  production  of  the  Nation. 


52        RIGHTS  AND   DUTIES  OF   BUSINESS  AND   LABOR 

If  only  half  as  many  men  make  shoes,  there  will  be  fewer 
shoes  for  all.  If  ten  million  men  work,  and  five  million 
are  idle,  the  latter  will  have  to  be  fed  by  the  others,  with 
less  food  to  go  around.  In  short,  the  more  intelligent 
and  industrious  the  workmen  are  and  the  greater  the 
number  who  are  employed,  the  greater  the  product  is 
which  all  at  last  share. 

The  reduction  of  the  hours  of  labor.  —  On  the  other 
hand,  there  is  a  limit  beyond  wliich  men  do  not  work 
efficiently.  They  will  not  work  to  ad\'antage  if  wearied, 
oppressed,  or  discontented.  Free  men  will  do  more 
work  in  eight  hours,  putting  their  good  will  or  interest 
into  their  work,  than  in  ten  or  twelve  hours  of  slavish 
labor.  Of  course  there  are  times,  as  in  the  harvest,  when 
men  must  rush  things  and  rest  afterwards. 

The  general  duty  of  labor.  —  It  follows  that  every  one 
must  contribute  his  share  somehow  toward  the  sum  of 
the  product  of  the  Nation.  For  if  anyone  only  eats  and 
drinks  and  enjoys,  but  does  not  labor,  he  makes  the  Na- 
tion poorer.  To  work  is  not  merely  a  necessity,  it  is 
an  honorable  obligation.  That  a  man  is  rich  gives  him 
no  right  to  consume  or  lessen  the  wealth  of  the  Nation. 
On  the  contrary,  his  wealth,  like  the  richer  farmer's  tools 
and  stock,  is  an  added  reason  why  he  should  do  a  larger 
share  for  the  good  of  all. 

Different  kinds  of  laborers.  —  The  word  laborer  prop- 
erly covers  all  kinds  of  service  in  behalf  of  the  household 
or  the  community.  In  the  larger  sense  not  only  the 
miner,  the  stevedore,  the  farmer,  or  the  blacksmith,  but 
also  the  clerk,  the  bookkeeper,  the  teacher,  the  super- 
intendent of  the  mill,  the  president  of  the  bank,  the 
trustees  of  property,  are  laborers  or  workmen.     Socrates 


LABOR  AND   COMPETITION  53 

the  philosopher,  and  Tennyson  the  poet,  Macaulay  the 
historian,  and  Darwin  the  naturalist,  all  have  each  added 
in  his  way  to  the  resources  of  mankind.  Even  a  child  who 
shows  an  obUging  temper  makes  the  work  of  older  people 
easier,  like  the  oiler  who  keeps  the  machinery  running. 

Disturbances  in  industry.  —  It  is  impossible  to  divide 
the  labor  of  the  Nation  exactly,  so  that  each  shall  do  his 
fair  share.  Some  are  more  willing  or  more  capable  than 
others.  Some  are  quicker  in  finding  their  proper  places. 
Some  like  to  work  and  others  do  not.  If  any  part  of  the 
body  fails  to  take  its  share  of  the  burden,  strain  comes 
upon  the  rest.  Moreover,  if  the  body  is  exposed  to 
sudden  change,  the  circulation  is  checked  and  one  suffers 
a  chill.  So,  in  a  great  industrial  society,  any  sudden 
change  of  conditions  is  likely  to  cause  disturbance. 
Thus  there  are  frequent  changes  in  the  demands  for 
labor.  There  may  be  a  sudden  need  of  wheat,  or  of  boots 
and  shoes,  and  many  will  start  wheat-farms,  or  go  into 
the  shoe  shops,  till  presently  there  is  more  wheat  or  there 
are  more  boots  and  shoes  than  are  called  for  at  once. 
Every  invention  or  improvement,  however  beneficial  in 
the  long  run,  is  apt  for  a  time  to  cause  disturbance  and 
inconvenience.  Thus,  if  the  farmer  buys  a  reaping- 
machine,  he  will  not  need  to  hire  so  many  men,  who 
may  not  at  first  find  a  new  employment.  The  use  of 
steam  has  multiplied  the  power  of  the  world,  but  it  has 
also  caused  disturbance  to  the  old-fashioned  industries 
worked  by  hand. 

The  requirements  of  commerce  also  vary.  A  scarcity 
of  food  in  Europe  may  force  a  demand  on  the  American 
food  supply,  or  the  change  of  a  foreign  tariff  may  shut  out 
our  goods  from  the  use  of  millions  of  people. 


54        RIGHTS  AND   DUTIES  OF  BUSINESS  AND  LABOR 

There  may  be  too  many  men  trying  to  get  a  living  in 
the  cities,  where  expenses  are  greater  than  in  the  country. 
Or  there  may  be  more  lawyers  or  architects  than  the 
Nation  now  needs,  and  the  extra  lawyers  must  find  some- 
thing else  to  do.  This  irregularity  in  employment  causes 
inconvenience  and  trouble  and  often  serious  suffering. 

Business  crises.  —  It  is  said  that  "  there  are  tides  in 
the  affairs  of  men."  So  business  and  work  have  their 
high  and  low  tides.  This  is  partly  because  men  have  not 
yet  learned  to  see  far  enough  ahead  to  provide  the  exact 
amount  of  wheat,  iron,  and  other  materials  that  they 
need.  There  are  not  Hkely  to  be  too  many  people  to 
work,  but  there  may  be  too  many  workers  in  certain  in- 
dustries and  too  few  in  others.  The  law  of  supply  and 
demand  acts  in  such  cases  to  cut  down  profits  and  wages, 
and  to  turn  men  from  employments  where  they  are  less 
needed  to  those  where  they  are  more  needed.  Mean- 
while, during  the  process  of  change,  work  stops,  men  are 
thrown  out  of  employment,  less  wealth  is  created,  busi- 
ness becomes  dull,  merchants  fail,  the  mills  which  are  not 
well  managed  go  into  bankruptcy,  and  new  enterprises 
are  checked.  Thus,  whenever  men  work  bhndly  in  any 
direction,  a  period  of  reaction  is  likely  to  set  in  till  the 
balance  is  readjusted;  as  when  one  uses  certain  muscles 
to  exhaustion  those  muscles  must  be  rested  and  other 
muscles  brought  into  play. 

The  free  system.  —  Whenever  men  are  free  to  get  a 
living  or  to  pursue  wealth  as  each  chooses,  the  usual 
result  is  competition.  Competition  really  means  free 
industry.  Thus,  one  may  choose  his  trade  or  profes- 
sion, or  if  he  does  not  like  it,  he  may  change.  He  is  free 
to  work  hard  or  not;  he  may  make  his  own  bargains  and 


LABOR  AND  COMPETITION  55 

set  his  price  upon  the  value  of  his  labor  or  his  products. 
He  is  free  to  acquire  property  to  any  extent,  or  to  part 
with  it.  He  is  free  to  invest  his  money  wherever  he 
thinks  that  it  will  bring  him  the  largest  return,  in  the 
land  or  on  the  sea;  or  to  hoard  it,  if  he  can  afford  to  be  so 
foolish.  If  anyone  by  working  harder,  or  by  his  skill, 
or  by  intelligence,  can  make  better  wages  than  his  neigh- 
bor, he  is  free  to  live  better  or  he  can  live  simply  without 
working  so  hard.  His  neighbor  is  free  to  follow  his  ex- 
ample and  to  learn  to  excel  him  in  turn.  If  one  has 
genius,  as  Rothschild  had,  for  handling  and  managing 
money,  he  is  free  to  exercise  this  genius,  as  another  is  free 
to  handle  his  tools. 

The  law  of  free  industry.  —  Anyone  is  free  to  work 
when  and  where  he  chooses  and  at  such  terms  as  he  can 
make  for  himself,  provided  he  does  not  interfere  with 
other  men's  rights.  He  is  not  free  to  snatch  what  belongs 
to  them,  or,  being  stronger,  to  push  them  aside,  or  trip 
them  up,  or  hinder  their  freedom.  He  must  not  interfere 
with  them  by  force,  nor  oppress  them  by  fraud,  or  by 
getting  laws  passed  to  the  disadvantage  of  others;  the 
rule  of  the  playground  that  all  the  boys  are  free  to  play 
as  they  like,  only  so  as  not  to  interfere  with  each  other, 
holds  good  for  industry. 

The  good  side  of  freedom.  —  The  freer  men  are  to 
choose  their  work  and  to  use  and  enjoy  its  results,  the 
more  work  they  are  willing  and  happy  to  do.  Their 
energy  and  enterprise  are  called  out,  their  wits  are 
sharpened,  their  hopes  are  stirred.  At  its  best  work 
becomes  like  play,  an  exercise  of  skill  and  power.  If  any- 
one wins  unusual  success,  others  are  encouraged  to  try 
the  better  methods.    If  anyone  enjoys  his  money,  his 


56        RIGHTS  AND   DUTIES  OF  BUSINESS  AND  LABOR 

neighbors  are  urged  to  work  harder,  that  they  and  their 
children  may  have  the  same  enjoyment.  Thus  every 
one  accomplishes  more  work  in  a  condition  of  freedom, 
and  the  Nation  is  richer  than  if  bad  customs,  like  slavery 
and  caste,  or  hard  and  fast  rules  fetter  and  restrict  men 
and  compel  them  to  work.  Do  not  children  enjoy  their 
sports  better  when  left  to  themselves,  than  they  do  when 
the  teacher  meddles  and  makes  rules  for  them  ? 

Wherever  men  are  really  free  to  work,  to  earn,  and  to 
save  or  use  their  earnings  as  they  please,  the  capable,  the 
industrious,  the  temperate,  and  the  intelligent  tend  to 
rise  to  prosperity.  A  considerable  and  increasing  class 
become  "  capitalists  "  by  the  value  of  their  houses  or 
shops,  or  the  amount  of  money  in  the  bank.  The  skillful 
are  always  in  demand,  and  generally  at  good  wages. 

The  moral  side.  —  Moreover,  when  men  labor,  earn, 
and  save  or  spend  with  freedom,  they  develop  patience, 
self-reliance,  self-sacrifice,  venturesomeness,  integrity,  re- 
spect for  others'  rights,  generosity.  The  slaves  of  the 
kindest  master  could  not  develop  these  qualities.  If  a 
committee  or  government  of  the  wisest  men  could  man- 
age and  make  rules  for  the  rest,  and  provide  for  every 
one's  necessities,  men  would  not  learn  the  sterling  qual- 
ities of  manhood  so  well  as  by  being  thrown  upon  their 
own  resources.  In  fact,  the  strongest  characters  have 
been  worked  out  through  patient  effort  amid  difficult 
circumstances. 

Certain  evils  of  the  free  system.  —  If  some  are  free 
to  work  hard  and  earn  more,  others  must  be  free  to 
work  less  and  earn  little;  as,  if  boys  race,  some  will  come 
in  behind.  What  if  they  become  jealous  and  suspicious 
of  the  more  successful  ones,  and,  instead  of  trying  again 


LABOR  AND   COMPETITION  57 

and  doing  better,  grow  discontented  and  sulky?  But 
the  worst  trouble  is  that  the  energetic  and  fortunate 
people  too  frequently  grow  hard,  proud,  and  selfish. 
Sometimes  they  are  the  beneficiaries  of  privileges  and 
monopolies  which  they  fear  to  lose.  Even  in  a  free 
land  the  laws  do  not  secure  complete  freedom.  No 
man  is  quite  free  as  long  as  he  is  dependent  upon  another 
man,  his  employer,  to  secure  work  and  a  living  for  his 
family. 

The  men  at  the  bottom.  —  We  have  learned  in  ordi- 
nary times  to  feed  and  clothe  the  population.  We  do  not 
mean  to  let  anyone  starve  in  the  face  of  plenty.  But 
the  risk  of  occasional  suffering  still  remains,  especially 
among  the  unskillful  and  the  newcomers  who  cannot 
speak  our  language.  They  cannot  find  employment  as 
fast  as  they  come  to  the  country;  they  accept  work  for 
a  meager  pittance;  the  wages  of  others  are  kept  down. 
This  is  because  men  are  free  to  seek  a  living  where  they 
please,  but  not  free  enough  to  get  away  at  once  from 
where  they  are  not  needed  to  another  place  where  their 
services  would  be  in  demand.  If  they  were  not  free  to 
come  and  go,  fewer  could  crowd  into  the  city.  But  if 
men  choose  to  be  free,  they  must  sometimes  bear  the 
consequences  of  their  freedom.  Would  any  system 
work  well  if  the  people  remained  ignorant  and  careless  ? 

Two  kinds  of  competition.  —  There  are  two  kinds  of 
competition.  One  is  that  of  brutes  that  struggle  with 
each  other.  So  there  are  brutal  or  thoughtless  men, 
who  try  to  get  as  much  as  they  can  for  themselves  by 
pushing  and  crowding  the  others.  They  seek,  like  robber 
barons,  to  make  their  living  at  the  expense,  or  by  the 
loss,  or  out  of  the  labor,  of  others.    We  have  plenty  of 


58        RIGHTS  AND   DUTIES   OF   BUSINESS  AND   LABOR 

laws  to  restrain  oppression  and  fraud,  but  good  laws  are 
of  no  use  unless  the  people  are  behind  them.  Better 
than  laws  is  a  new  pubhc  opinion  against  men  who 
seek  to  live  by  getting  away  the  property  of  others. 
The  boys  and  girls  in  our  schools  can  help  in  making 
this  new  pubhc  opinion. 

The  competition  of  men :  emulation.  —  The  competi- 
tion of  brutes  is  to  get  away  what  the  others  possess. 
The  competition  of  men  is  to  do  more  and  better  work; 
it  is  to  economize  material  and  power;  it  is  to  add  to 
the  sum  of  human  wealth  and  enjoyment.  In  the  com- 
petition of  men  every  one  in  the  end  becomes  better  off; 
some  excel,  while  the  level  is  raised  and  the  opportuni- 
ties of  all  are  enlarged.  The  object  of  intelligent  men 
now  is  not  to  snatch  the  food  from  the  table,  but  to 
heap  the  table  with  larger  and  more  varied  supphes. 


CHAPTER   VIII 
THE   GRIEVANCES   OF  THE  POOR 

Two  extremes  in  society.  —  The  condition  of  man- 
kind in  barbarous  times  was  that  of  constant  peril  from 
disease  and  famine.  Men  frequently  did  not  know 
where  their  bread  would  come  from.  Our  present  civil- 
ization has  not  yet  raised  all  men  above  the  chronic 
dangers  in  which  our  forefathers  lived.  There  are 
many,  especially  in  the  cities,  whose  meager  wages 
barely  keep  them  from  actual  want.  They  cannot 
always  get  work.  Frequently  their  wages  are  cut 
down,  or  they  are  thrown  suddenly  out  of  employment. 

There  are  thus  two  extremes  in  society  —  those  who 
live  in  luxury  and  have  more  than  they  need  or  deserve, 
and  others  whose  toil  seems  hopeless.  Justice  and 
humanity  alike  raise  the  question,  how  this  unequal 
distribution  of  wealth  can  be  kept  from  working  cruelty. 

Social  discontent.  —  In  most  industrial  countries 
many  people  are  bitterly  discontented  about  these  things. 
These  are  the  socialists;  they  beheve  that  something 
must  be  wrong  in  a  community  which  allows  a  few  to 
grow  rich  while  many  remain  in  abject  want. 

The  discontented  are  divided  into  various  classes. 
Some  of  them  have  suffered  so  cruelly  from  bad  govern- 
ment, as  in  Russia,  that  they  favor  revolution.  Some, 
the  anarchists,  do  not  believe  in  governments  with  armies 
and  police  to  enforce  laws,  but  think  that  men  would 
behave  better  if  they  were  free  of  the  control  of  the  State. 

59 


6o        RIGHTS   AND   DUTIES  OF  BUSINESS  AND   LABOR 

Some  go  to  the  opposite  extreme,  and  believe  that  the 
government  should  own  all  the  capital,  and  furnish  every- 
one with  work  and  supplies.  Others  think  it  a  great 
abuse  that  individuals  can  own  all  the  land  and  make 
others  pay  rent  for  it.  They  would  have  the  land  so 
held  by  the  community  that  no  one  could  have  land 
which  he  did  not  use.  Every  one  should  then  pay  a 
fair  rent  to  the  government,  that  is,  to  all  the  people, 
to  be  expended  for  the  benefit  of  all.  Some  people 
wish  to  fix  the  tax  system  (the  single  tax)  so  that  every 
one  can  enjoy  only  as  much  land  as  he  would  actually 
use;  for  this  use  he  should  pay  rent  to  the  State. 

Many  also  claim  that  the  government  should  own  the 
railroads,  the  telegraph,  the  gas  and  water-works,  and 
perhaps  also  the  mines  and  factories,  and  other  prop- 
erty, now '  worked  by  great  companies.  The  govern- 
ment could  then  furnish  employment  to  laborers  with 
just  wages  and  fair  hours  of  work. 

In  general,  whoever  wishes  to  add  to  the  kinds  of 
wealth  which  the  people  own  together  is  so  far  a  social- 
ist. In  a  free  and  civilized  country  most  men  are  partly 
socialists,  inasmuch  as  they  favor  common  schools, 
parks,  public  buildings,  sewage,  water-works,  and  the 
post  office,  and,  in  fact,  a  common  government. 

The  men  and  the  system.  —  One  cause  of  men's  pov- 
erty and  distress  lies  in  the  fact  that  the  people  who 
make  up  society  are  still  very  imperfect.  The  body 
cannot  be  sound  and  well  unless  the  parts  are  sound. 

The  inefficient.  —  There  is  everywhere  a  class  of 
ne'er-do-well  people,  feeble  in  body  or  mind,  and  lacking 
in  energy  or  skill.  Their  misfortune  is  not  so  much 
that   they   are   poor,    as    that    they    lack    health    and 


THE   GRIEVANCES  OF  THE   POOR  6 1 

energy.  If  many  of  a  people  are  inefficient,  as  in  cer- 
tain tribes  of  savages,  the  whole  community  must  be 
poor. 

The  ignorant.  —  What  if  a  large  proportion  of  people 
are  ignorant?  The  ignorant  not  only  cannot  earn  or 
produce  as  much  as  the  intelHgent,  but  they  also  waste 
food,  fuel,  money,  and  life  itself  in  a  thousand  ways. 
If  an  ignorant  people  or  a  single  ignorant  household 
were  given  the  best  arrangements  possible,  they  would 
not  prosper. 

The  idle.  —  How  many  idle  or  lazy  people  do  we 
know,  who  do  not  care  to  study  or  read,  or  even  to  play, 
who  prefer  to  watch  others  play,  who  do  not  desire  to 
work?  The  more  of  these  there  are,  the  harder  must 
others  work.  However  excellent  our  social  arrange- 
ments were,  the  idle  people  would  drag  upon  us.  Their 
needs  now  urge  them  to  work  at  least  part  of  the  time. 
Should  we  use  the  arm  of  the  law  and  compel  them  to 
work,  or  should  we  let  them  Hve  on  the  community? 
Neither  course  would  be  good  for  them  or  make  them 
happy. 

The  unfortunate.  —  There  are  many  who,  without 
being  imbecile  or  inefficient,  are  rendered  helpless 
through  sickness,  accidents,  losses,  and  the  death  of 
friends.  Among  these  are  widows  and  orphans  who 
may  be  permanently  unable  to  earn  their  Hving.  All 
these  lower  the  average  of  the  prosperity  of  the  commu- 
nity. Others  must  cheerfully  work  the  harder  in  order 
to  make  good  for  their  misfortunes.  No  mere  change 
in  the  arrangement  of  property  will  remove  this  class. 
But  we  can  largely  reduce  their  number  by  preventing 
and  removing  the  causes  of  accidents  and  diseases. 


62         RIGHTS  AND   DUTIES   OF   BUSINESS  AND   LABOR 

The  vicious.  —  Besides  the  cost  of  prisons  and  police, 
the  labor  of  the  community  has  to  bear  the  constant 
burden  of  the  vices  which  waste  property,  destroy  health, 
and  ruin  character.  Drunkenness  alone  has  hitherto 
been  the  cause  of  a  large  proportion  of  the  poverty. 

On  the  other  hand,  vice,  and  especially  drunkenness 
and  idleness,  prevail  wherever  there  is  injustice  or  op- 
pression; no  one  behaves  at  his  best  unless  he  believes 
in  the  fairness  of  his  government,  his  employer,  his 
teacher. 

A  problem.  —  We  who  make  up  human  society  are 
more  or  less  imperfect,  more  or  less  educated,  more  or 
less  successful  or  happy.  How  can  any  social  plan 
work  well  till  we,  the  individuals,  are  better?  How 
can  a  crew  win  a  prize  in  the  best  of  boats,  unless  the 
rowers  are  strong  and  skillful?  Can  we  contrive  any 
improvement  by  which  all  can  possess  and  enjoy  more? 

The  objects  of  society.  —  One  object  is  material,  that 
is,  an  abundant  supply  of  all  sorts  of  products.  Does 
anyone  think  we  have  a  suflEicient  supply  now?  Sup- 
pose we  have  enough  now  to  give  an  a\'erage  of  three 
dollars  a  day  for  each  person?  How  can  we  all  have 
more?  One  way  is  to  contrive  to  produce  more,  either 
by  working  harder,  or  by  better  management,  or  (what 
comes  to  the  same  thing)  by  good  care  not  to  waste 
our  dollars  when  we  get  them. 

Justice.  —  We  organize  and  make  laws  to  secure  as 
much  justice  as  possible.  Can  we  ever  get  perfect 
justice?  Should  we  be  content  if  we  got  it?  Who 
knows  that  his  father  or  his  employer  gives  him  his 
exact  dues?  Suppose  a  boy  thinks  his  lesson  worth 
more  than  the  teacher  marked  him.    Suppose  a  man 


THE   GRIEVANCES  OF   THE   POOR  63 

values  his  work  too  much,  Can  we  ever  make  such 
men  contented  ?  Can  society,  that  is,  all  of  us  together, 
do  this  better  than  teachers  or  parents  do  it?  Some 
now  have  more  and  others  less  than  they  deserve. 
Should  we  prefer  to  share  alike,  without  asking  how 
much  anyone  did?  Is  any  man,  or  any  number  of 
men,  wise  and  good  enough  to  award  perfect  justice? 

Suppose  now  that  every  one  who  wants  justice  tries 
to  do  it;  the  parents  try  and  the  children  try  too;  the 
teacher  tries,  and  the  pupils;  the  employers  and  the 
employed  people  try;  in  all  our  deahngs  every  one  tries 
hard  to  do  justice  to  every  other.  Who  would  not 
choose  to  do  justice,  and  a  Httle  more,  now  and  then, 
and  possibly  be  willing  to  suffer  an  injustice  once  in  a 
while,  rather  than  to  try  so  hard  to  get  justice  for  our- 
selves as  sometimes  to  do  injustice  to  others? 

Freedom  and  manhood.  —  The  greatest  object  to  be 
gained  by  human  society  is  manhood  or  character. 
Give  us  men  and  women  who  think  for  themselves, 
unafraid  of  what  others  say  or  do,  with  plenty  of  hearty 
good  will  and  sympathy  for  each  other.  Find  us  some 
new  system  to  increase  our  supplies  if  you  can,  but 
unless  it  will  also  make  our  people  more  energetic, 
capable,  generous,  and  high-minded,  we  will  not  ac- 
cept it. 

Faith  or  trust  in  men.  —  Human  society  is  bound 
together  by  confidence.  We  trust,  on  the  whole,  that 
our  fellow-men  will  do  right;  they  and  we  are  more 
alike  than  we  are  different.  We  trust,  if  we  show  them 
what  is  wrong,  that  they  will  be  fair  and  correct  it  for 
us,  as  we  would  do  for  them.  If  men  cannot  be  trusted 
in  the  long  run  to  do  right,  no  laws  or  systems  can  be 


64        RIGHTS  AND   DUTIES   OF   BUSINESS  AND   LABOR 

trusted.  For  men  make  and  enforce  the  laws.  But  if 
men  can  be  trusted,  the  fewer  laws  we  make  to  com- 
pel them,  the  better  they  behave.  Who  of  us  likes  to 
be  forced  to  do  right?  Who  of  us  is  not  pleased  to  be 
trusted?  Society  ought  to  be  like  the  model  school, 
where  rules  are  least  needed. 

Summary.  —  However  much  we  desire  to  cure  injustice, 
or  to  bring  rehef  to  the  poor,  we  must  preserve  freedom. 
We  must  get  justice  by  doing  it;  we  cannot  cure 
one  kind  of  injustice  by  doing  another.  If  we  knew 
that  some  one  had  more  wealth  than  he  deserved,  would 
this  make  it  right  for  us  to  appropriate  his  wealth? 

It  is  probable  that  the  permanent  common  wealth 
will  largely  increase,  at  least  in  the  form  of  school- 
houses,  hospitals,  museums,  pubHc  grounds,  and  build- 
ings. No  one  can  foresee  sufficiently  to  be  sure  that 
various  services,  now  performed  by  great  corporations 
of  individuals,  may  not  sometime  be  advantageously 
performed  by  the  whole  body  of  the  people. 

The  fact  is,  when  all  are  faithful  and  honest  enough 
to  be  trusted  to  act  fairly  as  individuals,  all  can  then 
be  trusted  to  act  justly  together.  Neither  can  all  act 
together,  doing  each  other  no  injustice,  unless  the  indi- 
viduals first  learn  to  be  just;  as  the  boys  of  a  club 
cannot  play  well  together  till  its  members  are  each 
willing  to  do  their  share  of  the  work,  free  of  jealousy, 
and  happy  to  see  each  other  succeed. 


CHAPTER   IX 
THE   ABUSES   AND   THE   DUTIES   OF   WEALTH 

The  significance  of  property.  —  Property  gives  its  pos- 
sessor a  lien  more  or  less  on  the  produce  of  the  world. 
Besides  the  share  which  his  work  or  skill  buys,  he  is 
also  entitled  to  an  extra  share  representing  his  property. 
He  may  even  do  nothing,  and  yet  draw  from  the  world 
an  income  equal  to  the  value  of  the  labor  of  hundreds 
of  men.  It  is  as  if  the  world  carried  a  mortgage  upon 
its  shoulders.  If  one  thinks  of  the  products  of  the 
world  as  put  into  a  vast  pile,  a  certain  part  of  the  pile 
must  be  given  to  the  owners  of  property.  On  the  other 
hand,  is  not  the  pile  larger  on  account  of  the  property 
which  has  been  used  as  capital?  The  owners  of  prop- 
erty have  furnished  the  necessary  tools,  machinery,  and 
materials.  The  property-owners  have  often  made  the 
tools  by  their  skill,  or  invented  the  machinery,  or  gath- 
ered the  material  by  their  frugaHty.  So  far  as  this  has 
been  the  case,  no  one  grudges  them  their  larger  share 
in  the  products.  Nor  is  anyone  poorer  because  they 
have  more. 

The  rich.  —  A  few  rich  men  in  a  community  often 
possess  a  disproportionate  share  of  the  property.  This 
is  true  on  a  small  scale  in  a  fishing  village  or  among 
farmers.  It  is  partly  on  account  of  good  fortune,  by 
which  one  man  out  of  a  hundred  finds  the  school  of 
fish  or  the  nugget  of  gold.  It  is  partly  the  result  of 
training  and  character,  since  few  know  how,  or  care, 

()5 


66        RIGHTS   AND   DUTIES   OF   BUSINESS  AND   LABOR 

to  manage  and  keep  their  property.  It  is  partly  also 
because  property,  like  a  snowball,  after  it  has  been 
rolled  up  to  a  certain  size,  tends  to  grow  bigger  and 
bigger. 

Besides  those  who  are  rich  through  the  ownership  of 
property,  such  as  houses  and  lands,  there  is  a  consid- 
erable class  of  people  who  are  rich  through  the  in- 
comes which  genius,  special  ability,  or  skill  enables 
them  to  draw.  The  voice  of  a  great  singer,  the  acumen 
of  a  great  lawyer,  the  insight  of  a  physician,  or  the 
rare  administrative  ability  of  a  railroad  superintendent 
brings  the  same  sort  of  exceptional  income  as  the  pos- 
session of  visible  property,  and  gives  its  possessor 
"  money  power."  Rare  skill  or  genius,  like  good  for- 
tune, is  a  natural  inequality,  making  one  man  to  differ 
from  another.  We  find  such  differences  in  a  school  or 
family.  They  make  life  interesting.  But  we  do  not 
always  love  or  value  most  those  who  possess  exceptional 
ability. 

The  rich  who  do  no  service.  —  The  custom  of  man- 
kind has  not  only  allowed  men  to  enjoy  the  advantage 
of  their  fortune  or  exceptional  ability,  but  also  to  give 
their  property  to  others,  and  especially  to  their  children. 
Many  are  rich  who  have  done  no  more  service  them- 
selves for  the  enrichment  of  mankind  than  if  they  had 
not  been  born.  Sometimes  the  law  has  let  children  in- 
herit fortunes  which  the  fathers  had  acquired  by  fraud. 
As  long  as  we  permit  the  good  and  deserving  to  grow 
rich,  and  to  transmit  their  wealth  to  their  children,  the 
dishonest  will  sometimes  do  the  same. 

Different  uses  of  wealth.  —  Suppose  one  of  the  chil- 
dren in  a  family  takes  better  care  of  his  toys  than  the 


THE  ABUSES  AND   THE   DUTIES  OF  WEALTH       67 

others,  or  is  ingenious  and  makes  playthings  for  him- 
self, and  so  possesses  more  than  the  rest.  The  whole 
household  has  more  resources  than  if  he  had  less.  So, 
if  one  can  make  the  pile  of  the  products  of  the  world 
larger,  every  one  else  will  be  better  off.  Thus,  if  a 
millionaire  lays  out  his  income  in  building  houses,  al- 
though he  may  grow  richer  by  the  rent,  the  city  also  will 
be  richer,  and  every  one  may  have  better  and  cheaper 
shelter.  So  if  he  builds  a  mill,  gives  work  to  a  thousand 
men,  and  makes  flour  or  cloth. 

But  suppose  the  rich  man  uses  the  power  of  his 
wealth  to  get  away  what  others  possess;  suppose  that 
he  buys  all  the  houses  and  charges  higher  rent;  or  sup- 
pose he  and  others  with  him  own  a  railroad  and  refuse 
to  take  corn  to  market  unless  the  farmer  pays  ruinous 
freight  bills;  or  suppose  rich  men  could  buy  all  the 
water  power  and  tax  every  one  in  the  country  for  its 
use.     Such  conduct  creates  a  monopoly. 

Monopolies,  good  and  bad.  —  It  is  a  monopoly  when 
one  or  a  few  hold  and  control  the  use  of  any  valuable 
thing.  But  a  monopoly  is  not  always  bad  or  unfair. 
Jenny  Lind's  voice  was  a  sort  of  natural  monopoly.  It 
gave  her  the  opportunity  to  become  rich.  The  laws 
confer  a  monopoly  upon  an  inventor  or  author.  No 
one  can  use  the  invention  or  publish  the  book  without 
paying  the  man  who  holds  the  patent  or  copyright. 
The  laws  even  give  the  inventor  the  right  to  charge 
more  than  is  fair,  if  he  chooses  to  be  so  foolish.  Many 
monopolies  are  plainly  oppressive.  If  Robinson  Crusoe 
had  secured  the  only  spring  of  water  upon  his  island, 
and  had  refused  to  let  new  colonists  have  water  without 
working  for  him,  this  would  have  been  cruelty.     So  it 


68        RIGHTS   AND   DUTIES   OF   BUSINESS   AND   LABOR 

is  when  men  buy  up  some  article  of  universal  necessity, 
like  rice,  coffee,  or  quinine,  in  order  to  get  their  own 
price  out  of  others'  pockets;  or,  again,  when  they  get 
laws  passed  which  compel  us  to  use  the  product  of 
their  mines  or  their  mills  rather  than  goods  made  else- 
where. 

The  limit  of  monopolies.  —  The  great  moral  laws 
which  govern  the  world  limit  monopolies.  If  the  mo- 
nopoly is  abused,  it  checks  or  kills  itself.  The  great 
singer  may  ask  too  large  a  price;  the  author  or  the  in- 
ventor may  charge  so  much  as  to  stop  his  sales.  The 
railroad  will  not  make  so  much  money  by  high  rates  as 
by  carrying  more  goods  at  fair  rates;  or,  if  its  rates  are 
exorbitant,  another  road  may  be  built.  The  salt  or 
the  sugar  must  not  cost  too  much,  or  people  will  send 
abroad  to  get  their  supplies.  This  holds  true  if  the  mo- 
nopoly is  not  protected  by  force  or  by  law.  But  if  the 
laws  make  the  monopoly,  giving  advantages  to  one  or 
to  the  few,  or  to  a  class  of  nobles  or  rich  men,  the  rem- 
edy lies  in  making  the  laws  equal  for  all. 

Land  monopoly.  —  We  have  already  said  that  land 
is  like  no  other  property;  no  man  created  it  as  men 
create  houses  and  ships.  Moreover,  there  is  a  limit 
to  the  land  in  a  country,  but  there  is  no  limit  to  the 
things  that  men  create.  Does  it  not  seem  as  if  the 
laws  governing  the  holding  of  land  ought  to  be  quite 
different  from  the  laws  that  control  other  property? 

The  holding  of  land  is  now  especially  subject  to  abuse. 
For  instance,  it  sometimes  happens  in  a  city  that  one 
man  or  a  few,  owning  land  needed  for  building  houses, 
hold  it  so  as  to  keep  it  out  of  the  market  and  arrest  the 
growth  of  the  city,  or  they  ask  an  unreasonable  price. 


THE  ABUSES  AND  THE  DUTIES  OF  WEALTH       69 

This  makes  a  monopoly.  The  idle  owners  may  finally 
lease  their  land  for  other  men  to  use,  and  so  draw  a 
large  income  for  themselves  from  the  prosperity  of  the 
city. 

So  when  men  get  control  of  great  tracts  of  fertile  land, 
or  of  timber,  or  of  mines:  the  time  comes  when  these 
men  have  a  monopoly,  and  can  demand  their  own  price 
for  the  land.  This  price  has  to  come  out  of  other 
men's  pockets.  For  the  men  who  hold  the  land  mo- 
nopoly do  not  add  to  the  wealth  of  the  world,  or  confer 
any  benefit  by  holding  their  property  out  of  the  market. 

The  cure  of  land  monopolies.  —  The  laws  may  be 
made  either  to  encourage  monopolists  of  land  or  to  dis- 
courage them.  It  rests  largely  with  the  assessors  of 
taxes  to  see  that  the  men  who  hold  more  land  than 
they  use,  hoping  to  make  money  by  keeping  it,  shall 
pay  as  much  into  the  treasury  as  if  the  land  were  sold 
to  put  buildings  upon  it  or  to  cultivate  it. 

The  rivalry  of  the  rich.  —  Kings  used  to  be  fooHsh 
enough  to  fight  with  each  other  to  extend  their  domain; 
so  rich  men  sometimes  ruin  each  other's  property  in  the 
hope  of  wanning  more  at  others'  loss.  Fortunes  some- 
times change  hands  on  Wall  Street  as  at  a  gambling- 
table.  Men  contrive  to  injure  the  trade  or  the  business 
of  their  rivals,  to  make  it  unprofitable  to  run  their 
mills,  and  to  drive  them  into  bankruptcy.  This  sort 
of  struggle  does  not  make  the  pile  of  the  product  of 
the  world  larger,  but  lessens  the  general  wealth  and 
produces  hardship  as  in  time  of  war. 

Waste  by  the  rich.  —  A  great  fortune  may  be  Like  a 
reservoir  in  which  the  water  is  stored  to  irrigate  the 
fields.     But  suppose  the  man  uses  his  income  for  his 


yo        RIGHTS   AND    DUTIES   OF   BUSINESS   AND   LABOR 

own  indulgence,  for  his  whims  and  fancies,  like  the 
famous  mad  king  of  Bavaria.  Suppose  he  spends  it  in 
costly  banquets,  or  locks  it  up  in  private  pleasure- 
grounds.  Even  so  he  cannot  spend  without  giving  some 
of  his  money  back,  through  the  goods  he  pays  for  and 
the  men  whom  he  hires.  Nevertheless,  his  waste  and 
extravagance  become  a  pubUc  loss.  For  while  the  in- 
vestments of  income  in  new  buildings  or  railroads 
cheapen  prices  and  rents,  the  expense  for  extra  service 
and  luxuries  makes  prices  higher.  The  e\'ils  of  gigantic 
wealth  might  be  such  that  the  community  would  be 
forced  to  erect  some  limit  or  safeguard  against  the  abuse 
of  money  —  as  we  have  to  do  when  a  man  wastes  his 
earnings  and  starves  his  children. 

Capitalists.  —  The  poor  man  begins  to  be  rich  as  soon 
as  he  has  acquired  any  kind  of  property,  as  tools  or 
land,  or  more  than  he  needs  to  use  at  once  for  himself. 
He  then  becomes  a  capitalist.  He  may  be  an  owner  of 
shares  in  the  great  railroad  for  which  he  works.  The 
bank  or  railroad  in  which  he  is  an  owner  may  possess 
more  property  than  any  man  in  the  State.  Like  the 
rich  man's  fortune,  so  the  company  composed  of  many 
little  capitahsts  is  a  reservoir  for  accumulating  and 
using  money.  It  has  also  some  of  the  same  dangers  of 
wasting  its  resources,  or  of  using  its  power  to  light  with 
others,  or  of  making  monopolies,  or  even  of  controlling 
legislation.  It  is  not,  therefore,  the  rich  who  are  to  be 
feared  so  much  as  wasteful,  reckless,  or  unscrupulous 
men,  whether  they  have  much  or  little. 

The  duties  of  wealth.  —  The  possession  of  wealth  is 
not  merely  a  legal  right  which  certain  ones  enjoy,  or  a 
luxury  of  which  a  few  accidentally  may  have  more  than 


THE   ABUSES    AND   THE   DUTIES   OF   WEALTH        7 1 

their  share.  Wealth  imposes  certain  duties  upon  its 
possessor. 

Trusteeship.  —  There  are  in  the  United  States  thou- 
sands of  millionaires,  holding  the  titles  to  a  large  pro- 
portion of  the  land,  banks,  railroads,  mines,  and  factories. 
Their  actual  or  personal  services  to  the  community 
cannot  generally  have  been  worth  as  much  money  as 
they  possess.  They  may,  therefore,  justly  be  consid- 
ered as  so  many  trustees,  having  for  the  time  the  care 
and  management  of  the  accumulation  of  the  wealth  of 
the  whole  community.  This  great  fund,  as  we  have 
seen,  is  partly  the  product  of  human  labor  and  thought, 
and  partly  the  bounty  of  nature.  It  is  morally  sacred 
for  purposes  of  good.  The  fact  that  this  obligation  is 
not  legal,  but  moral,  makes  it  more  honorable.  The  idea 
of  trusteeship  does  not  apply  merely  to  millionaires. 
Every  person  is  responsible  for  what  he  uses  or  spends. 

So  far  as  rich  men  acknowledge  and  act  under  this 
obligation  of  trusteeship,  there  may  be  Httle  public 
injury  in  their  acquiring  and  holding  as  much  wealth  as 
they  please.  Moreover,  if  anyone  is  a  fooHsh  or  in- 
capable trustee,  the  rule  is  that  his  wealth  goes  out  of 
his  hands,  as  power  disappears  from  one  who  does  not 
know  how  to  use  it. 

Service.  —  Does  the  possession  of  property  ever  give 
anyone  a  right  to  lead  a  useless  or  idle  Hfe?  On  the 
contrary,  the  more  one  inherits  or  accumulates,  the 
more  he  is  bound  to  the  universal  duty  of  some  kind  of 
service  in  making  the  world  better,  richer,  or  happier. 
The  more  wealth  one  possesses,  the  meaner  he  is,  like  a 
selfish  older  brother  in  the  household,  if  he  does  no  good 
with  his  money,  or  if  he  becomes  only  a  bigger  drone 


72         RIGHTS   AND   DUTIES   OF   BUSINESS   AND   LABOR 

in  the  hive.  Does  anyone  imagine  that  happiness  is 
gained  by  being  mean  and  grasping? 

Sharing.  —  The  trusteeship  of  property  makes  it 
shameful  for  any  intelligent  person  to  lavish  luxuries 
upon  himself.  Shameful,  too,  is  unnecessary  exclusive- 
ness,  especially  with  regard  to  grounds,  paintings,  and 
works  of  art.  What  can  we  think  of  a  man  who  fences 
off  from  the  public  a  great  forest,  or  appropriates  for 
himself  alone  a  tract  of  the  seashore?  How  can  a  man 
forget  the  principles  of  honor  and  kindliness  which  hold 
in  every  home  and  schoolroom  ?  We  let  a  child  own  his 
knife  or  football  and  make  him  responsible  for  it,  but 
we  expect  him  wilHngly  to  share  its  use  with  the  others 
and  not  to  lock  it  up  for  his  own  pleasure.  We  do  not 
need  laws  for  this  purpose;  our  public  opinion  makes 
the  law. 

Public  munificence.  —  It  was  the  custom  of  the  Athe- 
nians to  expect  their  richer  men  to  undertake  certain 
special  kinds  of  public  expense,  as  the  fitting  out  of  a 
trireme,  or  the  cost  of  a  festival.  So  in  our  times  we 
expect  no  rich  man  to  live  and  die  without  public  bene- 
factions. It  is  not  merely  generosity  to  give;  it  is  the 
return  of  a  debt.  Much  of  the  accumulated  wealth  of 
the  world  has  arisen  from  the  toil  and  effort  of  the  men 
of  the  past,  from  whom  we  all  inherit  property,  ideas, 
and  inventions.  Are  we  not  bound  to  keep  good  what 
we  have  inherited,  in  special  provision  for  the  future  — 
for  public  works  and  buildings,  for  schools  and  colleges, 
for  art  and  music?  The  more  property  one  has,  the 
larger  is  his  debt  to  the  past  for  the  sake  of  the  future. 
Should  we  not  be  ashamed  if  our  generation  left  the 
world  poorer  than  it  had  been  before  we  were  born  ? 


THE  ABUSES   AND   THE   DUTIES   OF   WEALTH        73 

The  ideal  city.  —  What  kind  of  town  would  you  like 
best  to  live  in  ?  Not  one  where  every  one  has  precisely 
the  same  income  as  every  one  else;  this  would  not  be 
just.  Not.  where  the  State  holds  everything  and  each 
individual  must  obey  the  rules  of  a  great  Central  Bureau 
at  the  capital.  Will  not  the  largest  prosperity  come 
where  the  laws  give  free  scope  to  the  skill  and  energy  of 
the  people  in  the  creation  of  wealth;  where  no  hurdles 
are  put  in  the  way  of  those  who  are  willing  to  work; 
where  least  money  is  wasted  and  squandered;  where 
every  one  is  respected  for  his  worth  as  a  man;  where 
citizens  are  accustomed  to  work  happily  together;  where 
the  wealth  which  all  help  to  earn  flows  naturally  to 
those  who  show  most  industry,  good  sense,  integrity, 
and  capacity  in  making  and  using  it?  In  such  condi- 
tions, the  wiser  and  more  able  people,  being  also  friendly 
and  considerate,  no  one  could  fall  into  grievous  poverty, 
and  no  man  could  use  his  wealth  for  oppression.  Thus, 
the  free  system  of  acquiring  and  holding  wealth  works 
out  justice  and  happiness,  as  fast  as  individuals  learn 
the  democratic  idea  —  to  respect  one  another  and  to 
do  to  others  as  they  wish  others  to  do  to  them.  But 
unless  there  are  plenty  of  such  fair-minded  and  demo- 
cratic citizens,  there  can  be  no  happiness  or  prosperity 
enforced  by  rules,  whether  made  by  a  sovereign,  like  the 
German  Emperor,  or  by  the  majority  of  a  republic. 


CHAPTER   X 

BUYERS  AND   SELLERS;  OR,   THE  MUTUAL 
BENEFIT 

There  are  two  theories  of  the  conduct  of  business. 
One  theory  is  that  each  party  in  trade  aims  to  get  an 
advantage  over  his  neighbor:  one  should  try  to  get  as 
much  and  give  as  Httle  as  possible.  If  goods  are  de- 
fective, the  seller  should  conceal  the  fact.  The  only 
rights  which  this  theory  of  business  recognizes  are  legal 
rights.  One  must  not  overreach  far  enough  to  come 
within  the  penalties  of  the  law.  Otherwise,  so  far  as 
the  law  does  not  prescribe,  the  other  party  to  a  bargain 
must  look  out  for  himself. 

The  notion  underlying  this  theory  of  business  is  that 
whatever  one  makes,  the  other  loses.  As  in  gambling, 
the  gain  of  the  mnner  means  that  others  must  lose,  so  in 
business  it  is  sometimes  supposed  that  the  successful 
merchant  grows  rich  at  the  expense  of  his  neighbors. 
Business  is  thus  only  a  game  in  which  every  one  is  try- 
ing to  win  other  people's  money.  The  laws  are  the 
rules  of  the  game. 

The  idea  of  business.  —  The  fact  is  that  buyers  and 
sellers  perform  a  mutual  service  not  only  to  each  other, 
but  for  the  benefit  of  the  public.  Mercantile  business 
is  not  a  game,  but  an  industry,  like  farming  or  manu- 
facturing. The  merchant  increases  the  value  of  goods 
by  bringing  them  to  market.  He  therefore  deserves 
wages  or  salary  for  the  service  which  he  renders  in  col- 

74 


BUYERS  AND  SELLERS;   OR,  THE  MUTUAL  BENEFIT        75 

lecting  and  distributing  his  goods.  He  receives  his 
wages  in  the  form  of  the  surplus  of  his  sales  over  their 
cost.  The  larger  his  sales  and  the  greater  his  skill,  — 
that  is,  the  more  valuable  his  services,  —  the  greater 
his  income  deserves  to  be.  The  law  of  supply  and 
demand  regulates  this.  The  income  of  merchants  is 
not,  however,  uniform.  Sometimes  it  is  less  than  the 
equivalent  of  the  work  and  cost  which  they  have  spent, 
and  sometimes  it  is  much  more.  It  involves  risk  and 
forethought  and  attention  to  numerous  details.  In  the 
long  run,  the  merchant's  income  is  nearly  the  same,  as 
equal  labor,  skill,  and  experience  would  produce  in  any 
other  industry. 

It  follows  that  what  the  merchant  honestly  makes  is 
not  at  anyone's  expense  or  loss.  The  wheat  gathered  in 
the  warehouses  is  actually  worth  more  than  when  in  the 
farmers'  granaries.  Neither  the  farmer,  therefore,  nor 
anyone  else  has  lost  by  the  merchant's  fair  profit  in  the 
purchase  and  sale  of  the  wheat.  So  with  other  prod- 
ucts. 

The  rights  of  buyers  and  sellers.  —  The  earliest  kind 
of  trade  was  barter.  In  barter  each  party  was  both 
buyer  and  seller.  In  fair  barter  each  shared  the  advan- 
tage of  the  exchange;  for  example,  a  pack  of  skins  was 
exchanged  for  a  sack  of  wheat.  So  in  modern  trade, 
which  is  only  a  more  complicated  kind  of  barter.  In  a 
fair  sale  the  buyer  and  seller  divide  the  value  of  a  mutual 
advantage  between  them;  each,  therefore,  ought  to  be 
better  off  than  before.  If  a  dealer,  as  a  rule,  got  for 
himself  the  whole  advantage  of  his  bargains,  it  would 
be  the  same  as  getting  what  did  not  belong  to  him. 
In  fact,  business  could  not  go  on  in  this  way.     In  the 


76         RIGHTS  AND   DUTIES  OF  BUSINESS   AND   LABOR 

long  run  the  advantage  must  be  mutual  in  men's  bar- 
gains. 

It  follows  that  overreaching,  even  though  the  laws 
do  not  specify  it,  is  an  attempt  to  get  what  belongs  to 
another.  The  sale  of  goods  which  are  defective  or 
below  the  standard  — -  the  adulteration  of  food  or  the 
watering  of  milk  —  is  not  trade,  but  an  attempt  to  get 
what  belongs  to  others.  So,  too,  if  purchasers  seek  to 
beat  prices  down  to  less  than  the  cost  of  goods,  they 
try  to  get  what  belongs  to  others,  and  they  tempt  men 
to  cheat  them. 

Is  honesty  the  best  policy?  —  It  is  not  only  just  that 
buyers  and  sellers  shall  share  in  the  mutual  advantage 
of  their  bargains,  it  is  also  for  their  interest.  This  is 
the  meaning  of  the  proverb,  ^^  Honesty  is  the  best 
policy. ^^  Business  is  best  when  every  class  gets  full  pay 
for  its  services.  If  the  farmers  do  not  get  their  share  of 
the  proceeds  of  their  labor,  they  will  have  less  money  to 
spend  and  in  the  end  the  merchants  will  feel  the  loss  in 
the  slackening  of  their  business.  Men  who  have  been 
cheated  in  a  trade  cannot  so  well  afford  to  trade  again; 
on  the  other  hand,  men  appreciate  just  treatment  and 
tend  to  treat  the  other  man  likewise.  In  a  community 
where  men  aim  to  share  generously,  values  increase  and 
there  is  more  wealth  to  share.  Better  yet,  it  is  a  pleas- 
ure to  be  sure  that  the  other  man  with  whom  we  deal 
is  satisfied. 

Legitimate  business.  —  It  follows  that  only  those 
kinds  of  business  are  righteous  which  result  in  benefit  to 
the  public.  Who  wants  to  engage  in  a  business  which 
does  no  good,  or  which  results  in  harm  and  loss  to  the 
community  ? 


BUYERS  AND  SELLERS,    OR,  THE  MUTUAL  BENEFIT         77 

The  law  of  supply  and  demand,  or  competition  in 
buying  and  selling.  —  We  can  imagine  all  the  cattle  of 
the  country  to  be  in  the  hands  of  a  few  families,  who 
have  cattle  and  nothing  else.  They  must  therefore  have 
wheat  and  other  suppUes  from  the  farmers.  They  be- 
gin by  exchanging  wth  the  nearest  farmer  at  his  own 
price,  which  gives  him  a  large  profit.  A  second  farmer 
presently  appears  and  offers  his  wheat  for  less;  and  the 
first  farmer,  rather  than  not  sell,  reduces  his  price. 
Thus,  after  a  time,  by  competition,  the  farmers  fix  a 
price  as  low  as  they  can  afford.  Thereafter  the  ex- 
change of  cattle  and  wheat  regulates  itself  according  to 
the  plenty  or  scarcity  of  the  one  product  and  the  other. 
If  the  cattle  men  have  a  good  year,  they  can  afford  to 
furnish  cattle  at  a  lower  price;  if  wheat  is  scarce,  it 
must  be  dearer. 

In  some  such  way  as  this  the  prices  of  all  sorts  of 
things  are  fixed.  The  more  valuable  or  the  rarer  a 
thing  is  —  in  other  words,  the  more  work  it  costs  to 
obtain  it  —  the  higher  its  price.  A  great  demand  for 
any  article  sets  many  fresh  hands  at  work  to  supply  it, 
and  it  presently  becomes  plentiful;  or,  if  the  demand 
falls,  the  price  is  lowered  accordingly.  Thus,  iron  was 
once  scarce  and  costly,  till  men  learned  to  produce  it  on 
a  great  scale;  then,  all  sorts  of  ironware  became  cheap. 
There  was  once  immense  profit  in  trading  with  China 
and  India;  I:here  were  also  great  risks.  Now  the  mer- 
chants make  so  small  profits  in  tea  and  indigo  that  it 
hardly  pays  any  better  to  build  ships  for  the  Eastern 
trade  than  to  build  houses  at  home. 

Selling  in  ''the  dearest  market."  —  Suppose  that  a 
farmer  raises  fruit  and  vegetables,  which  few  of  his 


78        RIGHTS  AND   DUTIES   OF   BUSINESS   AND   LABOR 

country  neighbors  care  to  buy.  A  few  miles  away,  in  the 
town,  many  people  need  his  products.  Their  demand, 
being  active,  allows  the  farmer  a  good  price.  This  is 
because  he  brings  his  fruits  where  they  are  most  wanted. 
If  he  sends  his  goods  to  a  great  city,  and  furnishes 
superior  fruit  to  persons  who  demand  the  best,  he  will 
receive  still  better  prices.  The  "  dearest  market "  is 
wherever  the  demand  or  need  is  greatest.  Whoever  takes 
the  pains  to  meet  such  a  demand  will  be  well  paid. 
The  dearest  market  also  is  usually,  though  not  always, 
where  people  can  afford  to  pay  a  higher  price.  Thus,  the 
dearest  market  for  the  farmer  and  fisherman  is  in  the 
city,  where  most  of  the  money  is.  It  is  of  mutual  ad- 
vantage to  buyer  and  seller  when  goods  are  brought  to 
the  dearest  markets.  By  and  by  competition  will  bring 
the  prices  down  so  that  every  one  can  have  enough  at 
reasonable  cost. 

Buying  in  the  cheapest  market. —  The  cheapest  market 
is  where  the  supply  is  most  abundant.  The  cheapest 
market  for  fish  is  on  the  shore  where  fishing-boats  come 
in.  Here  is  the  place  to  buy  to  best  advantage.  The 
place  to  buy  clothing  most  cheaply  is  in  the  great  shop 
where  clothing  is  piled  on  the  shelves.  Whoever  wiU 
buy  where  goods  are  abundant  and  therefore  cheap,  ac- 
commodates the  seller,  who  wants  money  for  his  goods. 
Thus,  every  one  gains  when  purchasers  buy  in  the 
cheapest  market.  If,  however,  too  many  purchasers 
crowd  into  the  cheap  market  so  that  the  goods  become 
scarce,  it  is  fair  to  all  to  raise  the  prices.  In  this  case 
those  buy  the  goods  who  need  them  or  care  most  for 
them;  but  those  who  can  get  along  without  them  do 
not  buy,  or  they  purchase  something  else,  or  they  seek 


BUYERS  AND  SELLERS;    OR,  THE  MUTUAL  BENEFIT        79 

a  cheaper,  that  is,  more  plentiful,  market.  Meanwhile, 
as  soon  as  prices  rise,  men  set  to  work  to  provide  a 
cheaper  market  again;  in  other  words,  to  furnish  a 
fresh  and  larger  supply. 

Freedom  in  trade.  —  In  barbarous  times  it  was  so 
perilous  and  costly  to  travel,  and  roads  were  so  bad, 
and  transportation  of  goods  was  so  risky  on  account  of 
pirates  and  shipwrecks,  that  men  often  starved  within 
a  few  miles  of  a  cheap  market.  For  many  centuries 
troublesome  tolls  were  collected  of  merchants,  and  cus- 
tomhouses stood  on  the  border  of  every  little  State,  so 
that  men  could  not  afford  to  bring  their  supplies  to  the 
markets.  For  want  of  free  trade  there  was  poverty 
and  suffering,  as  when  tight  cords  restrict  the  flow  of 
blood  to  the  limbs. 

Civilization  cuts  the  cords  and  gives  the  body  freedom 
to  act.  It  makes  free  turnpikes  and  bridges;  it  unites 
little  states  into  nations  and  removes  the  barriers  be- 
tween them;  it  builds  great  lines  of  railway.  In  the 
United  States  there  is  perfect  freedom  of  trade  among 
the  States  and  Territories.  When,  therefore,  the  crops 
fail  in  one  section,  supplies  flow  freely  in  from  other 
quarters  to  meet  the  demand.  Famine,  the  scourge  of 
ancient  times,  is  rendered  almost  impossible,  except  in 
time  of  prolonged  war.  The  farmer  in  Dakota,  with  his 
great  wheatfields,  is  brought  close  to  the  needy  markets 
of  New  England.  This  is  because  every  one  in  the 
Nation  is  free  to  buy  in  the  cheapest  market  and  to  sell 
in  the  dearest. 

Freedom  in  trrde ;  what  harm  it  may  do.  —  While 
freedom  in  trade  works  well  on  the  whole,  it  some- 
times does  harm,  just  as  laws  which  v/ork  well  for  the 


8o        RIGHTS  AND   DUTIES  OF   BUSINESS   AND   LABOR 

many  may  seem  to  do  injustice  to  individuals.  Thus,  it 
is  good  for  the  Nation  that  we  can  buy  corn  in  the  cheap- 
est market,  which  is  in  the  West;  but  this  at  first  was 
hard  for  the  Eastern  farmer,  who  could  not  raise  corn  so 
cheaply.  It  is  good,  on  the  whole,  that  the  Vermont 
fanner  can  sell  his  eggs  and  chickens  in  the  dearest  mar- 
ket, which  is  Boston  or  New  York,  but  this  makes  eggs 
and  chickens  dearer  for  the  people  in  Vermont.  We  know 
that  when  there  is  demand  in  the  brain  for  nourishing 
blood,  it  is  drawn  away  for  a  time  from  the  extremities. 

The  two  sides.  —  Competition  in  trade  may  be  selfish 
and  cruel,  if  a  neighbor  outbids  another  or  undersells 
him,  on  purpose  to  get  rid  of  him  and  to  control  his 
business;  or  if  a  great  firm  seeks  to  crush  its  rivals. 
When  there  is  a  great  snow  blockade,  cutting  off  a  city 
from  its  supplies,  it  is  selfish  and  cmel  if  the  milkmen 
exact  extortionate  prices  because  of  the  needs  of  suffer- 
ing children. 

But  competition  or  freedom  of  trade  need  not  be  sel- 
fish. A  class  of  boys  may  aim  each  to  get  the  most 
perfect  mark  of  excellence;  so  every  man  who  sells,  if 
he  be  honorable  and  high-minded,  may  aim  at  furnish- 
ing the  best  quality  of  articles  on  the  most  favorable 
terms  which  he  can  afford;  so  purchasers  may,  and 
sometimes  do,  scorn  to  exact  unreasonable  advantage 
from  the  necessities  of  the  seller.  There  is  no  need, 
because  a  man  carries  on  business,  to  forget  that  he 
deals  with  men  like  himself.  If  the  laws  allow  mean- 
ness and  extortion,  enlightened  public  opinion,  not  to 
speak  of  reHgion,  calls  the  louder  for  humanity  and 
friendliness,  and  brands  as  shameful  the  competition 
which  forgets  the  tnan  in  the  bargain. 


BUYERS  AND  SELLERS;   OR,  THE  MUTUAL  BENEFIT        8 1 

Paying  one's  debts.  —  Men  are  debtors  and  creditors 
in  turn,  according  as  they  owe  money  to  others  or  others 
owe  them.  If,  now,  a  man's  debtors  put  off  payment  or 
do  not  pay  at  all,  there  will  be  difficulty  in  his  paying 
his  creditors  as  he  has  promised,  and  again,  in  their 
paying  others.  As  the  failure  of  any  link  in  the  chain 
weakens  the  whole,  so  whenever  a  promise  is  broken  there 
will  be  suffering  and  loss.  If  many  do  not  pay,  money 
will  be  hard  to  obtain,  and  business  in  general  will  suffer; 
whereas  prompt  payment  by  one  gives  the  means  of  pay- 
ment along  a  whole  line  of  men.  The  money  which  be- 
fore failed  to  circulate,  moves  on  freely  and  makes  more 
business,  as  well  as  the  means  of  happiness,  every  tune 
it  is  promptly  paid. 

Bankruptcy.  —  It  often  happens  that  merchants  and 
others  fail  to  pay  their  obligations.  No  one  then  will 
trust  them  longer,  and  they  may  have  to  stop  their 
business.  This  is  a  hardship  not  only  to  them,  but  also 
to  others  who  depend  upon  them  —  their  employees,  as 
well  as  those  who  have  been  giving  them  credit.  The 
greatest  suffering  often  falls  on  those  who  are  turned 
out  of  employment. 

Bankruptcy  sometimes  happens  through  the  failure  of 
others;  but  most  often  it  comes  about  through  the  ex- 
travagance, the  folly,  the  unskillfulness,  and  even  the 
fraud  of  those  who  have  charge  of  the  business. 

Bankruptcy  laws.  —  When  men  fail  to  pay  their  debts, 
there  are  often  many  creditors,  all  of  whom  ought  fairly 
to  share  in  the  assets  or  property  of  the  debtor,  so  far 
as  he  has  anything  left.  It  may  be  that  the  debtor,  if 
the  creditors  will  agree  to  give  him  time  to  settle  his 
affairs,  will  contrive  to  pay  them  more  than  if  they 


82        RIGHTS  AND   DUTIES  OF  BUSINESS  AND  LABOR 

seized  and  divided  his  property  at  once.  It  may  be 
fair,  too,  if  the  debtor  honestly  gives  up  all  that  he  has, 
for  his  creditors  to  release  him  from  further  payment 
and  leave  him  free  to  go  on  in  business,  provided  he 
can  find  merchants  to  trust  him  again.  Bankruptcy 
laws  provide  through  the  proper  courts  for  the  protec- 
tion of  the  interests  of  both  debtors  and  creditors. 
Whereas  once  a  debtor  could  be  cruelly  imprisoned  by 
a  hard-hearted  creditor,  the  debtor  is  now  given  a  fair 
opportunity  to  make  up  his  losses. 

Sometimes  creditors  live  in  different  States.  The 
Constitution  of  the  United  States  gives  to  Congress  the 
power  to  make  bankruptcy  laws  for  the  Nation  and  so 
to  treat  creditors  in  a  distant  State  as  fairly  as  if  they 
lived  where  the  failure  took  place. 

As  men  abuse  other  laws,  so  the  dishonorable  some- 
times use  the  bankruptcy  laws  to  wrong  their  creditors 
and  to  secure  a  release  for  themselves  without  giving 
up  their  property.  On  the  other  hand,  men  of  honor 
sometimes  do  more  than  the  law  requires,  and  after 
being  released  from  their  creditors,  insist,  as  soon  as 
they  are  able,  upon  paying  the  full  amount  of  their 
debts.  If  every  one  carried  on  business  in  this  way 
there  would  be  few  failures. 


CHAPTER   XI 

EMPLOYERS   AND   THE   EMPLOYED:   THEIR 
INTEREST   IN   EACH   OTHER 

All  men  are  either  employers  of  labor  or  employees. 
Most  men  are  at  the  same  time  both  employers  and 
laborers. 

The  rights  of  employers ;  fidelity.  —  Fidelity  is  to  do 
another's  work,  or  the  public  work,  as  well  as  possible, 
or  as  well  as  if  it  were  one's  own.  The  truth  is,  that  the 
workman  sells  something,  namely,  his  work,  whether  of 
his  hands  or  his  brain;  and,  like  everything  else  sold, 
he  wishes  it  to  be  of  standard  quality.  Is  the  duty  of 
faithful  service  lessened  if  the  employer  pays  insufficient 
wages  or  salary?  No.  An  honest  man  can  never  do 
less  than  honest  work;  nor  is  the  service  merely  for 
the  employer;  the  whole  community  is  poorer  for  every 
wasted  hour  or  blundering  piece  of  work.  Worse  yet, 
the  man  who  performs  unfaithful  service  has  become 
degraded  and  demoralized.  Fidelity  includes  honesty, 
sobriety,  and  punctuality.  Courtesy  and  kindly  man- 
ners are  also  due  to  the  employer,  as  they  are  due  to 
every  one.  How  can  we  keep  friendly  relations  with 
others  if  we  are  rude  and  uncivil? 

The  rights  of  employees ;  wages  or  salary.  —  Who- 
ever sells  his  work  or  skill  is  entitled  to  its  fair  price  no 
less  than  if  it  were  corn  or  cloth.  Fair  pay  is  not  only 
a  righteous  amount,  but  it  includes  punctuality  in  pay- 
ment. Fair  pay  means  reasonable  and  humane  hours 
of  work  and  vacation  or  holiday  time.     We  are  learning 

83 


84        RIGHTS   AND    DUTIES   OF   BUSINESS  AND   LABOR 

that  the  rule  of  humanity  is  the  rule  of  effectiveness. 
Every  one  can  do  more  and  better  work  if  he  is  treated 
kindly. 

Respect.  —  The  employer  has  not  discharged  his  duty 
in  paying  a  man;  he  owes  him  also  courtesy  and  friendly 
respect.  How  can  he  forget  that  the  other  is  a  man 
like  himself? 

Honest  management.  —  Employees  are  not  only  en- 
titled to  fair  wages;  in  a  certain  sense  they  are  partners 
with  the  employers.  If  the  management  must  keep 
clear  of  speculative  hazards  which  risk  the  capital  of 
the  stockholders,  so  it  must  not  imperil  the  employ- 
ment of  its  workmen.  Loyal  employees  are  the  greatest 
asset  of  an  enterprise.  The  management  needs  to  keep 
them  together,  and  to  find  work  for  them  in  dull  times. 

The  labor  market.  —  In  one  \iew,  labor,  like  every- 
thing valuable,  is  subject  to  the  law  of  supply  and 
demand.  The  men  who  have  their  labor  to  sell  will 
bring  it  to  the  dearest  market,  that  is,  wherever  labor 
is  most  needed.  It  will  there  get  the  best  pay.  On  the 
other  hand,  those  who  wish  to  hire  labor  will  go  to  the 
cheapest  market;  that  is,  where  labor  is  plentiful.  Thus, 
if  a  company  wish  to  build  a  factory,  they  will  consider 
where  they  can  get  workmen  to  the  best  advantage. 
They  could  not  build  their  factory  in  Alaska  so  well  as 
in  Ohio,  because  the  latter  State  is  a  better  market  for 
labor.  Meanwhile,  wherever  they  build  their  factory, 
workmen  will  flock  there.  It  is  of  advantage  to  both 
employers  and  the  employed  to  buy  labor  in  the  cheap- 
est market  and  to  sell  it  in  the  dearest.  On  the  whole, 
work  is  thus  distributed  where  it  is  most  needed  and 
where  the  best  pay  can  be  given  it.     If  any  considerable 


EMPLOYERS  AND  THE  EMPLOYED        85 

number  of  workmen  are  getting  small  wages,  an  oppor- 
tunity is  afforded  to  get  better  wages  wherever  a  larger 
demand  is  made  for  their  help.  Employment  offices  are 
now  often  provided,  by  the  State  to  help  place  men  where 
they  are  most  needed. 

A  difficulty  :  the  human  element.  —  Labor  is  not 
simply  valuable  as  a  commodity.  It  is  human  also. 
When  corn  is  plenty,  or  inferior  in  quality,  it  is  no  great 
hardship  if  it  brings  a  low  price,  or  does  not  sell  at  all. 
But  the  workman  must  live;  he  may  have  a  family  de- 
pendent upon  him;  even  if  he  is  an  inferior  workman,  he 
must  still  be  housed  and  fed  as  a  man.  Moreover,  the 
laborer  cannot  easily  be  transported,  like  corn  or  commod- 
ities, wherever  the  demand  and  the  pay  are  greater. 
Many  circumstances  may  render  it  costly  or  impossible  for 
him  to  move  to  a  place  where  his  labor  will  be  in  demand. 

Low  wages ;  the  limit  of  decency.  —  Wliile  at  times 
the  number  of  workmen  may  be  far  greater  than  the 
demand,  there  is  a  limit  below  which  it  is  not  the  custom 
to  let  wages  fall.  This  limit  is  fixed  by  men's  consid- 
eration of  humanity.  The  more  high-minded  employ- 
ers are,  and  the  stronger  public  opinion  is,  the  higher  is 
this  limit  of  wages  to  wliich  a  man's  work  entitles  him, 
on  the  ground  that  he  is  a  man.  The  labor  unions  have 
helped  immensely  to  establish  a  public  opinion  which 
works  toward  better  standards  of  living  for  all  workers. 
Certain  excellent  laws  protect  them  from  overwork,  for- 
bid factory  work  for  children,  and  seek  to  prevent  em- 
ployers from  hiring  people  below  a  decent  or  sufficient 
wage.  This  is  often  called  the  minimum  wage,  and  it 
means  just  enough  to  support  the  worker  in  health.  Of 
course,  this  varies  constantly. 


86         RIGHTS  AND   DUTIES   OF   BUSINESS  AND   LABOR 

Employees  who  cannot  help  themselves.  —  In  years 
of  good  harvests  and  prosperity  there  is  more  money 
than  usual  to  spend,  and  there  is  more  employment  in 
all  industries  for  men  able  and  willing  to  work.  But  bad 
years  come  when  there  is  less  to  divide  and  to  spend, 
and  therefore  less  work  is  called  for.  The  inferior  or 
unskilled  workmen  are  the  first  to  suffer  for  want  of 
employment.  Moreover,  the  conditions  of  civilized  life 
require  costly  tools  and  machinery:  no  civilized  man 
can  easily  work  alone,  as  the  savage  can;  he  needs  the 
cooperation  of  others.  A  man  cannot  even  till  the 
soil  without  assistance  or  capital.  The  law  of  supply 
and  demand  works  after  a  while  to  correct  disorders 
of  industry,  and  to  set  men  again  to  work  where 
they  will  be  needed,  but  this  law  has  to  be  supplemented 
by  constant  sympathy  and  humanity  to  prevent  the 
helpless  from  suffering.  For  the  whole  body  of  the 
community  is  bound  up  with  the  welfare  and  prosperity, 
or  the  loss  and  misery,  of  any  portion.  If  individuals, 
then,  cannot  prox-ide  employment  for  their  neighbors 
who  wish  to  find  work,  it  may  be  the  duty  of  the  State 
or  the  city  to  provide  public  works,  such  as  the  conserva- 
tion of  forests  and  lands,  the  building  of  streets,  and  other 
improvements.  We  may  hope  that  better  education  will 
also  train  a  larger  proportion  of  the  children  to  such  skill 
and  faithfulness  as  will  give  them  permanent  employment 
at  all  times. 

Employers  who  cannot  help  themselves.  —  We  have 
seen  that  the  number  of  workmen  may  sometimes  be 
greater  than  can  be  employed;  or  business  may  be  dull 
and  unremunerative;  or  certain  factories  may  have 
greater  expenses  in  rent  and  interest  than  others,  and 


EMPLOYERS  AND  THE   EMPLOYED  87 

SO  cannot  afford  to  pay  sufficient  wages  to  go  on  making 
their  goods.  Unless  the  employers  are  successful  and 
can  accumulate  some  capital,  and  keep  their  plant  in 
good  repair,  they  cannot  weather  the  storms  which 
sometimes  threaten  the  financial  and  industrial  world. 
The  poorly  managed  shops  and  factories  are  often 
obHged  to  stop.  This  is  not  because  employers  are 
unwilling  to  keep  their  workmen,  but  because  they  have 
no  money  to  pay  them. 

Industrial  warfare ;  strikes  and  lockouts.  —  It  some- 
times happens  that  employers  and  employees  disagree 
and  quarrel.  This  may  be  on  account  of  some  foolish 
misunderstanding,  or  the  bad  and  arrogant  temper  of 
one  man.  In  some  cases  the  men,  who  perhaps  belong 
to  a  union,  vote  to  quit  work  until  their  demands  for 
better  hours  or  an  increase  in  wages  are  granted.  This 
is  called  a  strike.  Like  war,  it  means  loss  of  time  and 
money  on  both  sides,  and  often  great  suffering  to  the 
workmen's  families.  It  ought  to  be  justified  only  by 
urgent  necessity.  It  might,  like  war,  almost  always  be 
prevented. 

The  employers  may  make  war  upon  their  workmen  by 
shutting  down  their  works  and  stopping  wages  till  the 
men  accede  to  their  wishes.  This  is  called  a  lockout. 
It  results  not  only  in  hardships  at  the  time,  but,  as  in 
war,  in  the  loss  of  good  feeling  afterwards. 

Trade  unions.  —  The  world  was  never  so  full  as  it 
is  now  of  all  kinds  of  societies,  associations,  and  clubs 
in  which  men  and  women  cooperate  for  mutual  enjoy- 
ment or  the  protection  of  their  interests.  Among  the 
most  important  and  powerful  of  these  societies  are  the 
trade  or  labor  unions.     Thus,  the  printers,  the   teleg- 


88        RIGHTS  AND  DUTIES  OF  BUSINESS  AND  LABOR 

raphers,  and  other  skilled  men  form  unions  among  them- 
selves, and  later  various  groups  of  trades  join  in  a 
greater  Federation  of  Labor.  Meanwhile,  groups  of 
employers  also  form  associations  for  their  common  in- 
terest. At  last  in  many  industries  the  fixing  of  prices, 
hours  of  work,  and  other  conditions  comes  to  be  a  process 
of  bargaining  between  the  representatives  of  the  unions 
on  the  one  side  and  of  the  employers  on  the  other. 
The  individual  workman  who  might  seek  in  vain  by 
himself  to  secure  fair  treatment  from  a  big  corporation, 
now  has  the  support  of  a  great  organization  wdth  expe- 
rienced officers  at  their  service  and  with  money  in  their 
treasury.  The  trade  unions  are  also  friendly  and  benefit 
societies,  pledged  to  help  their  members  in  times  of  sick- 
ness and  unemployment. 

The  open  and  the  closed  shop.  —  Not  all  the  men  in 
a  trade  choose  to  belong  to  a  union.  There  are  various 
reasons  why  some  prefer  to  remain  outside.  The  rules 
for  entrance  sometimes  prove  to  be  a  barrier  against  new 
men.  For  the  men  in  a  union  are  reluctant  to  admit 
members  for  whom  they  cannot  see  plenty  of  regular 
employment.  In  some  cases  they  hold  a  certain  monop- 
oly of  skill,  and,  like  most  monopolists,  they  do  not  like 
to  be  disturbed.  There  are  also  men  who  prefer  to 
be  free  of  the  rather  military  discipline  of  the  unions. 
Suppose  the  majority  order  a  strike  to  which  the  minority 
object  as  unfair.  Ought  a  faithful  member  of  a  union 
ever  to  act  against  his  union?  Some  men  doubtless 
think  that  they  ought.  But  there  are  always  men  and 
women  outside  of  any  union.  Some  of  them  are  poor 
or  shiftless  workmen.  The  non-unionists  have  to  find 
places  in  "open  shops,"  that  is,  where  employers  run 


EMPLOYERS  AND  THE  EMPLOYED  89 

their  business  as  they  choose  and  prefer  to  have  non- 
union help.  They  may  pay  less  or  even  more  than 
union  wages.  But  they  do  not  bargain  with  the  unions. 
At  the  same  time  they  may  cheerfully  employ  members 
of  unions,  without  asking  the  question  whether  a  man 
belongs  to  the  union  or  not. 

On  the  other  hand,  the  unions  desire,  whenever  they 
become  strong  enough,  to  control  the  "help"  of  a  mill 
or  a  mine,  so  as  to  have  no  workers  in  it  except  members 
of  the  unions.  This  makes  the  "closed  shop."  A  non- 
union man  cannot  get  work  in  it,  unless  he  enters  one 
of  the  unions.  Sometimes  the  unions  go  so  far  as  to 
forbid  their  men  handling  goods  which  have  been  manu- 
factured in  an  open  shop.  The  unions  have  sometimes 
imitated  the  unfriendly  and  autocratic  methods  which 
employers  have  too  often  used  in  dealing  with  their 
workmen  or  other  employers.  All  such  actions  on  one 
side  or  the  other  are  like  war.  They  lead  to  reprisals, 
retaliation,  and  violence,  and  they  leave  an  ugly  temper 
which  spoils  honest  work  and  splits  people  of  the  same 
nation  into  hostile  camps. 

Arbitration.  —  When  men  differ,  or  even  when  they 
suffer  injustice,  there  is  a  more  sensible  method  than  to 
fight.  This  better  method  is  called  arbitration.  In  arbi- 
tration both  parties  agree  to  submit  their  case  to  an 
impartial  committee,  or  board,  and  to  abide  by  its  deci- 
sion. In  some  cases  each  party  chooses  one  member  of 
the  committee,  and  the  two  choose  a  third.  Sometimes, 
as  in  Massachusetts,  the  State  keeps  a  standing  Board 
of  Arbitration.  In  New  Zealand  the  law  provides  the 
means  of  arbitration  and  requires  employers  and  em- 
ployees to  settle  their  differences  peaceably,  without 


go        RIGHTS  AND   DUTIES  OF  BUSINESS  AND   LABOR 

compelling  all  the  people  in  their  town  to  suffer  in  their 
quarrel.  As  employers  and  their  employees  become 
more  intelligent  and  himiane,  arbitration  in  some  form 
may  be  expected  to  prevent  the  waste  and  ill-feeling 
always  occasioned  by  strikes  and  lockouts.  Quarreling 
is  stupid  business. 

The  interests  of  employers  and  the  employed  together. 
—  Of  course,  employers  need  nothing  so  much  as  thor- 
ough workmen.  Even  though  they  must  be  paid  high 
wages,  good  workmen  are  the  most  economical,  just  as 
goods  of  standard  quality  are  cheaper  in  the  end  than 
inferior  goods.  The  employer  with  skilled  and  willing 
men  may  easily  afford  to  pay  the  best  wages  and  yet 
produce  goods  which  will  sell  at  a  profit. 

The  success  of  the  employer  is  generally  to  the  in- 
terest of  the  workmen.  His  success  means  permanence 
in  work,  whereas  the  less  successful  shop  will  often  have 
to  be  closed.  His  success  means  the  abiHty  to  pay 
better  wages,  and  to  continue  to  pay  them  through  dull 
seasons.  The  successful  employer  will  have  large  capi- 
ital  and  credit,  and  will  be  able  to  keep  men  employed 
even  at  times  when  he  makes  no  profits  himself.  The 
employers  and  the  employed  ought  not  to  pull  apart, 
but  to  pull  together.  They  are  engaged  in  two  sides  of 
the  same  work. 

Cooperation  and  profit-sharing.  —  Enterprises  are 
often  undertaken  in  which  all  who  have  part  in  the 
work  share  in  the  profits.  This  used  to  be  done  in  the 
fisheries,  where  perhaps  a  group  of  neighbors  owned 
and  fitted  out  the  vessel.  It  has  been  done  in  certain 
manufactories  and  on  plantations.  It  has  been  done  on 
a  great  scale  in  England  (the  Rochdale  stores)  and  in 


EMPLOYERS  AND   THE  EMPLOYED  91 

Belgium  in  the  business  of  distributing  goods,  and  in  Den- 
mark and  Ireland  among  the  farmers.  The  best  form 
of  all  is  that  which  gives  the  workers  a  vote  in  the 
conduct  of  the  business  and  a  voice  also  in  the  election 
of  the  managers.  Why  should  not  every  business  be  a 
democracy  in  itself?  Why  should  it  not  have  directors 
to  represent  the  workers  as  well  as  directors  for  the  capi- 
tal? If  it  is  a  business  that  serves  the  pubhc  Kke  a 
railway  system,  why  should  it  not  have  directors  to 
represent  the  interests  of  the  people  who  use  the  road  ? 
Why  should  there  not  be  at  suitable  times  free  discus- 
sion of  the  subjects  which  concern  those  who  work,  and 
those  who  superintend,  and  the  people  whom  the  busi- 
ness serves?  Let  all  sides  understand  each  other  and 
so  learn  to  work  together  better. 

All  kinds  of  business,  however,  are  really  more  co- 
operative than  men  think.  For  the  payment  of  regular 
salaries  and  wages  (which  are  apt  to  rise  in  good  times, 
and  fall  in  poor  times)  is  simply  a  method  of  sharing  the 
profits  of  business  with  those  who  are  concerned  in 
carrying  it  on.  On  the  whole,  a  man's  share  depends 
upon  how  useful  or  necessary  he  is.  Moreover,  many 
great  corporations,  like  the  Pennsylvania  Railroad,  ad- 
vance their  wages  according  to  the  length  of  faithful 
service,  and  give  pensions  to  aged  workmen.  It  is  often 
possible  for  employees  to  invest  their  savings  in  the 
shares  of  the  company  for  which  they  work.  Of  course, 
however,  those  who  share  the  profits  of  their  work  must 
also  share  the  losses. 

Men  who  have  been  the  employees  of  others  some- 
times combine  and  establish  a  business  or  an  industry 
of  their  own.    The  new  enterprise,  like  any  other  cor- 


92        RIGHTS  AND   DUTIES  OF   BUSINESS  AND   LABOR 

poration,  is  then  subject  to  the  usual  conditions  of 
success,  namely,  the  energy,  prudence,  and  honesty  of 
its  managers. 

Women's  work  and  wages.  —  How  about  women's 
wages?  Ought  they  to  be  the  same  as  men's?  We 
have  seen  that  wages  follow  the  law  of  supply  and 
demand;  but  when  they  become  very  low,  humanity 
interposes,  and  forbids  paying  less.  As  a  rule,  this 
limit  to  which  wages  fall  is  lower  for  women  than  for 
men.  This  is  partly  because  of  the  survival  of  bar- 
barous ideas  as  to  the  worth  of  women.  It  is  partly 
because  certain  employments  are  beyond  women's 
strength,  while  the  number  of  women  seeking  work 
constantly  increases.  Many  women  who  live  at  home 
are  glad  to  earn  a  little  money  at  wages  lower  than 
they  could  afford  if  they  had  wholly  to  support  them- 
selves. Employers  who  find  wdlhng  hands  at  a  dollar  a 
day  cannot  easily  pay  more  to  other  women,  no  more 
skillful,  who  need  two  dollars  a  day. 

Moreover,  the  wages  of  women  are  allowed  to  be 
lower  than  in  the  case  of  men,  even  for  the  same  work, 
on  the  ground  that  a  man  must  have  enough  to  support 
a  family,  while  a  woman  more  often  has  only  herself 
to  support.  This  custom  frequently  works  hardship, 
but  its  service  is  to  keep  families  together.  Men's  work, 
as  a  rule,  is  also  for  life;  whereas  when  working  women 
marry  their  work  is  apt  to  change  to  meet  the  calls  of 
domestic  life. 

The  industrial  democracy.  —  We  are  used  to  the  idea 
of  a  political  democracy  in  which  every  man  is  a  citizen, 
with  the  opportunity  to  fit  himself  for  any  service  in 
the  State.    The  industrial  democracy,  or  the  Common- 


EMPLOYERS  AND  THE   EMPLOYED  93 

wealth  of  labor,  is  now  coming  into  view.  Here,  too,  we 
cannot  have  any  servile  class,  but  every  man  and  his 
labor  must  bear  the  hall  mark  of  worth.  Every  one  is 
respected  for  his  character  and  for  the  value  of  his  con- 
tribution to  the  conunon  product.  The  Commonwealth 
cannot  afford  to  allow  its  families  to  live  meanly.  It 
proposes  to  give  every  child  the  education  and  the  fair 
chance  to  make  his  way  up  to  a  useful  and  honorable 
place,  to  "make  good"  for  all  that  he  has  cost,  and 
to  leave  the  world  somewhat  better  off.  In  this  Com- 
monwealth human  society  is  a  grand  order,  b'ke  the 
human  body,  made  up  of  millions  of  living  cells.  The 
interests  of  each  are  the  interests  of  all,  and  all  are 
partners.  Friendliness  is  the  rule  and  not  the  excep- 
tion. Whoever  makes  human  Hfe  richer,  happier,  or 
nobler  belongs  to  this  Commonwealth. 


3  1158  00790  3304 


AA  001 


^57561    0 


SOUTH  bRN  BRANCH, 

UNlV'cRSITY  OF  CALIFORNIA. 


USRARY, 


;alif. 


